Q1 2024 Akoustis Technologies Inc Earnings Call
[music].
Okay.
Good day, ladies and gentlemen, and welcome to the acoustic technologies fiscal 2024 first quarter conference call.
Speaker 1: Good day, ladies and gentlemen, and welcome to the Acoustics Technologies Fiscal 2024 First Quarter Conference Call. As a reminder, this conference call is being recorded.
As a reminder, this conference call is being recorded.
Speaker 1: At the conclusion of the company presentation, Acoustics Management will take questions.
The conclusion that the company presentation acoustic management will take questions.
Speaker 1: To ask a question, please press star 1 on your telephone keypad to be placed into queue.
I ask a question. Please press star one on your telephone keypad to be placed into Q.
A replay of the call will be available on the Investor Relations section of the acoustics website.
Speaker 1: A replay of the call will be available on the Investor Relations section of the Acoustis website. Thank you.
Yeah.
Speaker 1: Thank you, operator, and good morning to everyone on the call. Welcome to Acoustics' first quarter fiscal 2024 conference call. We're joined today by our founder and CEO , Jeff Shealy, CFO , Ken Bowler, and EVP of business development, Dave Ickley.
Thank you operator, and good morning to everyone on the call welcome to <unk> first quarter fiscal 'twenty 'twenty four conference call.
We're joined today by our founder and CEO, Jeff Shealy, CFO, Ken Butler, and EVP of business development they've likely.
Before we begin please note that today's presentation includes forward looking statements about our business outlook all statements other than statements of historical facts included in this conference call such as expectations regarding our strategies and operations, including the timing and prospects of product development and customer orders and design wins part.
Speaker 1: Before we begin, please note that today's presentation includes forward-looking statements about our business outlook. All statements other than statements of historical facts included in this conference call, such as expectations regarding our strategies and operations, including the timing and prospects of product development and customer orders and design wins, possible collaborative or partnering relationships, litigation matters, and expected financial and operating results are forward-looking statements.
School collaborative partnering relationships litigation matters and expected financial and operating results are forward looking statements.
Speaker 1: Such forward-looking statements are predictions based on the company's expectations as of today and are subject to numerous risks and uncertainties.
Such forward looking statements are predictions based on the company's expectations as of today and are subject to numerous risks and uncertainties.
Speaker 1: The company and our management team assume no obligation to update any forward-looking statements made on today's call.
Company and our management team assume no obligations to update any forward looking statements made on today's call.
Speaker 1: Our SEC filings mention important factors that could cause actual results to differ materially. Please refer to our latest Form 10-K and Form 10-Q filed with the SEC to get a better understanding of those risks and uncertainties.
Our SEC filings mention important factors that could cause actual results to differ materially.
Please refer to our latest Form 10-K, and Form 10-Q filed with the SEC to get a better understanding of those risks and uncertainties.
Speaker 1: In addition, our presentation today will also refer to certain non-GAAP financial measures.
In addition, our presentation today will also refer to certain non-GAAP financial measures.
Speaker 1: A reconciliation of these measures to the most directly comparable GAAP measure is presented in our earnings call highlight release available in the investor section of Acoustis.com.
A reconciliation of these measures to the most directly comparable GAAP measures.
Presented in our earnings call highlight release available in the investors section of the closest dotcom.
Speaker 2: I would now like to turn the call over to Jeff Shuley, founder and CEO of Acoustic.
I would now like to turn the call over to Jeff Shealy, founder and CEO of acoustics.
Thank you, Ken and welcome everyone to our fiscal first quarter conference call.
Speaker 3: Thank you, Ken, and welcome everyone to our fiscal first quarter conference call.
Speaker 3: Revenue in the September quarter was within our guided range of down 15% sequentially.
Revenue in the September quarter was within our guided range of down 15% sequentially.
Speaker 3: During the September quarter, we had one customer that made up greater than 10% of our revenue.
During the September quarter, we had one customer that made up greater than 10% of our revenue.
Speaker 3: XBAL-related sales accounted for the top 5 customers and 7 out of the top 10 customers.
Ex BOL related sales accounted for the top five customers and seven out of the top 10 customers.
Speaker 3: Our top 10 customers made up 59% of revenue.
Our top 10 customers made up 59% of revenue.
Speaker 3: Our top 25 customers made up 74% of revenue.
Our top 25 customers made up 74% of revenue.
Speaker 3: In terms of regional sales, from our top 35 customers, which make up 80% of our revenue, 53% of those sales came from Asian customers, followed by 35% of sales came from North American customers, and 12% of our sales came from European customers.
In terms of regional sales from our top 35 customers, which make up 80% of our revenue 53% of those sales came from Asian customers, followed by 35% of.
Of sales came from North American customers and 12% of our sales came from European customers.
Earlier this calendar year.
Speaker 3: We commented on the buildup in channel inventory, particularly at our Wi-Fi customers in the Asia region, as we stated on last quarter's call, we expected two quarters of slow down as we transition and ramp to new Wi-Fi AP platforms.
We commented on the build up in channel inventory, particularly at our Wi Fi customers in the Asia region. As we stated on last quarters call. We expect two quarters of slow down as we transition and ramp to new Wi Fi a P platforms.
Speaker 3: work through a slowdown in the infrastructure segment and transition a portion of our defense activity to new contract business.
[noise] worked through a slowdown in the infrastructure segment.
And transition a portion of our defense activity to new contract business.
Speaker 3: Consistent with our guidance on last quarter's investor call, we expect revenue for the December quarter to be $7 million or flat sequentially.
Consistent with our guidance on last quarters Investor call. We expect revenue for the December quarter to be 7 million were flat sequentially.
Speaker 3: In reaction to the slowdown in the market, the company implemented two rounds of meaningful expense and cost savings plans to significantly reduce cash
In reaction to the slowdown in the market the company implemented two rounds of meaningful expense and cost savings plans too.
Two significantly reduced cash burn moving forward.
Speaker 3: Ken will detail our activities and impact on reducing our cash burn during his upcoming comments.
Ken will detail, our activities and impact on reducing our cash burn during his upcoming comments.
Speaker 3: However, looking around the corner at the March quarter,
However, looking around the corner at the March quarter.
Speaker 3: We are seeing signals of inventory channel clearing.
We are seeing signals of inventory channel clearing.
Speaker 3: We are presently delivering new, lower-cost RF filter products and are receiving multiple new design wins in new Wi-Fi AP platforms with more RF filter content in.
We are presently delivering new lower cost RF filter products and are receiving multiple new design wins and new Wi Fi a P platforms.
With more RF filter content.
In early calendar 'twenty 'twenty four.
Speaker 3: As a first look, we expect to return to record quarterly revenue for the March quarter in the range of $8.3 to $8.8 million, or a sequential increase of 18 to 25 percent.
That's the first look we expect to return to record quarterly revenue for the March quarter in the range of 8.3 to $8 8 million or a sequential increase of 18% to 25%.
Speaker 3: We will update the March quarter guidance during next quarter's investor call.
We will update the March quarter guidance during next quarter's investor call.
Speaker 3: I would now like to take a moment to discuss updates involving the company's activity related to the Chips and Science Act of 2022.
I would now like to take a moment to discuss updates involving the company's activity related to the chips and Science Act of 2022.
Speaker 3: Regarding CHIPS Act funding, there are four updates to share with investors.
Regarding chipset funding there are four updates to share with investors.
Speaker 3: First, in mid-September, our Microelectronics Commons proposal focused on EW Tech Hub was not selected by the DoD. According to the September 20th announcement made by the government, the majority of the eight DoD Tech Hub awards went to major universities across the US.
First in mid September our Microelectronics Commons proposal focused on EW Tech hub was not selected by the D O D occur.
According to the September 20th announcement made by the government. The majority of the eight D. O D Tech hub awards went to major universities across the U S.
Speaker 3: Second, on October 23rd, Senator Schumer announced that the greater Rochester region was selected as a prestigious tech hub, opening significant federal funds from the Department of Commerce to boost critical supply chains in upstate New York.
Second.
On October 23rd.
Senator Schumer announced that the greater Rochester region was selected as a prestigious tech hub opening significant federal funds from the department of Commerce to boost critical supply chains in upstate New York.
Speaker 3: Acoustis is a member of the Tech Hub Consortium and will pursue meaningful opportunities with the Tech Hub residing in our backyard in upstate New York.
Acoustic <unk> is a member of the Tech hub consortium and will pursue meaningful opportunities with a tech hub residing in our backyard in upstate New York.
Third.
Speaker 3: Third, the CHIPS Act of 2022 includes a provision for a 25% refundable investment tax credit or CHIPS ITC on investments in facilities that manufacture semiconductors or semiconductor manufacturing equipment that were placed into service after December 31, 2022.
The chips Act of 2022 includes a provision for a 25% refundable investment tax credit or chips I T. C on investments in facilities that manufacture semiconductors or semiconductor manufacturing equipment that were placed into service after December.
31st 2022.
Speaker 3: we have to make the amount of the refundable tax credit applicable to accuse this to be
We estimate the amount of the refundable tax credits applicable to acoustics to be.
Speaker 3: three-and-a-half to four million dollars over the next eighteen months
Three and a half to $4 million over the next 18 months.
Speaker 3: And fourth, and finally, regarding our proposed expansion of our domestic manufacturing footprint, including both semiconductors and advanced packaging at our New York campus.
And fourth and finally regarding our proposed expansion of our domestic manufacturing footprint, including both semiconductors and advanced packaging at our New York campus under the Department of Commerce Chips for America program, we have completed a first pre application.
Speaker 3: Under the Department of Commerce Chips for America program, we have completed a first pre-application with.
With a D O C diff.
Speaker 3: The CHIPS Program Office, or CPO, of the DOC has received the pre-application submitted by Acoustas Technologies, Inc.
The chips program office or C. P O of the D. O C has received the pre application submitted by acoustic technologies, Inc.
Speaker 3: The CPO recommends that we move forward and submit a revised pre-application addressing questions raised in our original application.
The C. P O recommends that we move forward and submit a revised pre application addressing questions raised in our original application.
Speaker 3: Hence, our next step in the process is to file a revised pre-application.
That's our next step in the process is to file a revised pre application.
Once we complete our strategic review with our potential semiconductor partners, who require a partner to manufacture semiconductor materials.
Speaker 3: Once we complete a strategic review with our potential semiconductor partners who require a partner to manufacture semiconductor materials, wafers, and or packaging on our New York manufacturing campus.
Wafers into our packaging on our New York manufacturing campus.
Speaker 3: Next, I would like to discuss several updates in our primary target markets, beginning with Wi-Fi.
Next I would like to discuss several updates and our primary target markets beginning with Wi Fi.
Speaker 3: Our first milestone for the September quarter was to receive a design win for next generation Wi-Fi 7 with a consumer focused OEM.
Our first milestone for the September quarter was to receive a design win for next generation Wi Fi seven with a consumer focused OEM.
Speaker 3: We delivered a total of three design wins on the consumer front with all programs currently planned to begin production ramp in the March quarter of calendar 2024.
We delivered a total of three design wins on the consumer front with all programs currently planned to begin production ramp in the March quarter of calendar 'twenty 'twenty four.
Two programs, our four by four Mimo architectures.
Speaker 3: Two programs are 4x4 MIMO architectures.
Speaker 3: And the third program is a 2-by-2 MIMO architecture, all utilizing our recently released Wide-Bandwidth XBAL RF filter solutions in the high-band spectrum.
And the third program is a two by two Mimo architecture, all utilizing our recently released wide bandwidth ex BOL RF filter solutions and the high band spectrum.
Our second milestone was to secure a design win for a next generation Wi Fi seven solution with a tier one U S. Based carrier we remain confident that this carrier will launch with our filters on their platform, but we have moved this milestone to the December quarter in order to see volume shipments to validate our miles.
Speaker 3: Our second milestone was to secure a design win for a next-generation Wi-Fi 7 solution with a Tier 1 US-based carrier. We remain confident that this carrier will launch with our filters on their platform, but we have moved this milestone to the December quarter in order to see volume shipments to validate our milestone.
Stone.
Speaker 3: Our third milestone was to secure multiple RF filter design wins for our Tier 1 Enterprise Class customers' Wi-Fi 7 suite of routers and access points.
Our third milestone was to secure multiple RF filter design wins for our tier one enterprise class customers why five seven suite of routers and access points, we have been aggressively developing and qualifying these parts for our customer and have made shipments to our customer over the past few months and expect to announce.
Speaker 3: We have been aggressively developing and qualifying these parts for our customer and have made shipments to our customer over the past few months and expect to announce this design win in the December quarter.
This design win in the December quarter.
Speaker 3: Also, during the September quarter, we announced the introduction of our latest single crystal-doped piezoelectric materials into a key product, which is slated to ramp with an upcoming Wi-Fi 7 Enterprise customer.
Also during the September quarter, we announced the introduction of our latest single crystals doped ph electric materials into our key product, which is slated to ramp with an upcoming Wi Fi seven enterprise customer.
Speaker 3: These advanced materials are utilized to allow greater design margin and flexibility to the customer in the design of their system.
These advanced materials are utilized to allow greater design margin and flexibility to the customer and the design of their system.
Speaker 3: While the overall Wi-Fi market has been impacted over the past 12 months by excess inventory and slowing Wi-Fi AP demand post-COVID,
While the overall Wi Fi market has been impacted over the past 12 months by excess inventory and slowing Wi Fi a P demand post COVID-19.
Speaker 3: We see signs of reduced inventory in the channels for existing volume programs along with new platforms launching in early 2024.
We see signs of reduced inventory in the channels for existing volume programs.
Along with new platforms launching in early 'twenty 'twenty four.
Looking ahead in the December quarter, we expect to announce a design win for a next generation Wi Fi seven solution with a tier one U S based carrier.
Speaker 3: Looking ahead in the December quarter, we expect to announce a design win for a next-generation Wi-Fi 7 solution with a Tier 1 US-based carrier.
Speaker 3: Further, we plan to secure multiple design wins for our Tier 1 Enterprise Class customers Wi-Fi 7 suite of routers and we plan to secure a design win for Wi-Fi 7 solution with a Tier 1 Enterprise Class OEM.
Further we plan to secure multiple design wins for our tier one enterprise class customers why five seven suite of routers and we plan to secure design win for Wi Fi seven solution with a tier one enterprise class OEM.
Next I would like to discuss our recent developments in the five T mobile market.
Speaker 3: Next, I would like to discuss our recent developments in the 5G mobile market.
Speaker 3: During the September quarter, we've made no new shipments to our Tier 1 RF component customer.
During the September quarter, we made no new shipments to our tier one RF component customer.
Speaker 3: The slowdown in shipments is due to a slowdown in marketing and adoption of the product in the China market.
The slowdown in shipments is due to a slowdown in marketing and adoption of the product in the China market.
Speaker 3: Our customer's inability to secure a production slot on a new design program in the tier one market as well as other market headwinds.
Our customers inability to secure a production slot on a new design program and the tier one market.
As well as other market headwinds.
During the September quarter, we expect it to receive an order for at 2.4 gigahertz Wi Fi filter for our tier two five G. RF front end module customer.
Speaker 3: During the September quarter, we expected to receive an order for a 2.4 GHz Wi-Fi filter for our Tier 2 5G RF front-end module customer.
Speaker 3: We received not only an XBoss Foundry order for the 2.4 GHz band, but the customer also added two additional high-frequency Wi-Fi bands.
We received not only.
And ex BOL foundry order for the two four gigahertz band, but the customer also added two additional high frequency Wi Fi bands.
Speaker 3: This customer has completed previous design evaluation and has downselected the final design for release in the first half of calendar year 2024.
This customer has completed previous design evaluation and has down selected the final design for release in the first half of calendar year 'twenty 'twenty four.
Speaker 3: With the slowdown in headwinds in the mobile market, we have been focusing our resources on near-term opportunities.
With the slowdown in headwinds in the mobile market, we have been focusing our resources on near term opportunities in.
Speaker 3: in the Wi-Fi, 5G infrastructure, and automotive segment.
And the Wi Fi five G infrastructure and automotive segment.
Speaker 3: However, our anticipated milestones for the December quarter include, we expect to deliver the first of the three Wi-Fi filters to our Tier 2 5G mobile RF front-end module making customer, and finally, we expect to engage a fifth mobile partner offering our XBAW process and foundry for their module and discrete product needs.
However, our anticipated milestones for the December quarter include.
We expect to deliver the first of the three Wi Fi filters to our tier two five G mobile RF front end module, making customer.
And finally, we expect to engage a fifth mobile partner offering our export process and foundry for their module and discrete product needs.
Speaker 3: I will now discuss our progress in our network infrastructure business.
I will now discuss our progress in our network infrastructure business.
Speaker 3: During the September quarter, we experienced strong XBAR filter shipments to our CBRS customers targeting the U.S. market. However, we experienced minimal shipments in our small cell RF filters in the September quarter. Overall, we are seeing the 5G O-RAN and RAN market slow in the December quarter as operators take inventory of existing deployment.
During the September quarter, we experienced strong ex BOL filter shipments to our C. B R. S customers targeting the U S market.
However, we experienced minimal shipments in our small cell RF filters in the September quarter.
Overall, we are seeing the five G O ran and ran market slow in the December quarter as operators take inventory of existing deployments.
Speaker 3: We do expect the 5G small cell market to begin to improve in the March quarter and throughout calendar 2024 as carriers throughout the U.S., Europe , the Middle East, and Africa continue to deploy sub-5 gigahertz networks.
We do expect the five G small cell market to begin to improve in the March quarter and throughout calendar 'twenty 'twenty four as carriers throughout the U S. Europe.
Middle East and Africa continue to deploy sub five gigahertz networks.
Speaker 3: Regarding our milestone from the September quarter, we received a design win for our XBAL RF filters from a Tier 2 network infrastructure OEM for a massive MIMO base station.
Regarding our milestone from the September quarter, we received a design win for our ex BOL RF filters from a tier two network infrastructure OEM.
For a massive mimo base station.
The radio design includes 64.
Speaker 3: TRX paths with one filter in the transmit path and one filter in the receive path. Altogether, we have 128 filters of content in the radio unit and expect production to begin ramping in the second quarter of calendar 2024.
T Rx paths with one filter in the transmit path and one filter in the receive path altogether, we have 128 filters of content and the radio unit and expect production to begin ramping in the second quarter of calendar 'twenty 'twenty four.
Speaker 3: For the December quarter, we expect to complete the redesign and sample of our new and improved 5G Band 41 and 5G US 3.8 gigahertz network infrastructure filter solution.
For the December quarter, we expect to complete the redesign and sample of our new and improved five G band 41, and five G. U S 3.8 gigahertz network infrastructure filter solutions.
Speaker 3: The redesign of these filters pushed into the December quarter, given engineering priorities related to near-term Wi-Fi business.
The redesign of these filters pushed into the December quarter, given engineering priorities related to nearer term Wi Fi business.
Finally, before handing the call off to Ken I would like to provide an update on our defense and other markets business.
Speaker 3: Finally, before handing the call off to Ken, I would like to provide an update on our defense and other markets business.
Speaker 3: It is noteworthy that six out of our top 10 customers are in our defense and other businesses category. And I will begin with an update on our published milestones for the September quarter.
It is noteworthy that six out of our top 10 customers are in our defense and other businesses category and I will begin with an update on our published milestones for the September quarter.
Speaker 3: First, we made steady progress on securing a design win for an automotive wireless battery management system, or WBMS, solution used in a Tier 1 IC reference design. And we expect to close out this milestone in the December quarter.
First we made steady progress on securing a design win for an automotive wireless battery management system or W. B M. S solution used in a tier one I see reference design and we expect to close out this milestone in the December quarter.
Second we received a specification change from a key customer which delayed the start of the product qualification of our second X ball resonator for the timing control market.
Speaker 3: Second, we received a specification change from a key customer, which delayed the start of the product qualification of our second X ball resonator for the timing control market.
Speaker 3: At this point, we already started the qualification and plan to complete this product qualification in the December quarter.
At this point, we already started the qualification and plan to complete this product qualification and the December quarter.
Yeah.
Speaker 3: Beyond our published milestones, we achieved other notable milestones during the quarter in this segment.
Beyond our published milestones we achieved other notable milestones during the quarter in this segment.
As mentioned in the past our biggest success in the defense and other market segment was the introduction of our New X P. Three F technology, which incorporates a new revolutionary patented multi layer nano material that incorporates our single Crystal P. H O electric material.
Speaker 3: As mentioned in the past, our biggest success in the defense and other market segment was the introduction of our new XP3F technology, which incorporates a new revolutionary patented multi-layer nanomaterial that incorporates our single crystal piezo electric material.
Speaker 3: This new nanomaterial was developed with funding from the Defense Advanced Research Projects Agency, or DARPA, to scale the XBOM technology to frequencies up to 18 gigahertz.
This new nano material was developed with funding from the defense Advanced research projects agency or DARPA does.
Scale, the ex BOL technology to frequencies up to 18 gigahertz.
Speaker 3: At the end of the September quarter, we were awarded a multimillion dollar phase two contract option, which extends our current DARPA coffee contract.
At the end of the September quarter, we were awarded a multimillion dollar phase two contract option, which extends our current DARPA coffee contract.
Speaker 3: to four point eight million dollars including based in exercise option
Two $4.8 million, including base and exercised options.
The new phase two contract extends the funding for the program through December of 'twenty 'twenty four.
Speaker 3: The new phase two contract extends the funding for the program through December of 2024.
Speaker 3: During the September quarter, we received a purchase order as a foundry supplier supporting a new DARPA contract unrelated to our current DARPA COFFEE contract, which requires high-performance custom resonators for timing control applications.
During the September quarter, we received a purchase order as a foundry supplier supporting a new DARPA contract and.
Unrelated to our current DARPA coffee contract, which requires high performance custom resonators.
For timing control applications.
Speaker 3: Further, we completed initial wafer shipments from our New York fab during this September quarter, and we expect additional shipments over the next few quarters.
Further we completed initial wafer shipments from our New York Fab during the September quarter, and we expect additional shipments over the next few quarters.
Speaker 3: In addition, we achieved a design win at an international engineering and technology company supplying timing products for an electric meter application, and we have received purchase orders.
In addition, we achieved a design win at an international Engineering and technology company supplying timing products.
For an electric meter application and we have received purchase orders.
Speaker 3: for more than 300,000 pieces of initial volumes with scheduled delivery now into Q3 fiscal year 2024.
For more than 300000 pieces of initial volumes with scheduled delivery now into Q3 fiscal year 'twenty 'twenty four.
For the December quarter, and the defense and other market segments, we are expecting to achieve a design win of at least one of the following Chris.
Speaker 3: For the December quarter and the defense and other market segments, we are expecting to achieve a design win of at least one of the following.
Speaker 3: crystal oscillator, ball filter, and or saw filter used in an automotive wireless battery management system.
Crystal oscillator ball filter indoor saw filter used and in automotive wireless battery management system.
Solution.
Speaker 3: used in a Tier 1 IC reference design.
Used in a tier one I see reference design.
Speaker 3: Also, we plan to complete the qualification of the optimized second X-Baw resonator for a key customer in the timing control market. And we expect to deliver an X-Band ball filter utilizing Acoustas' advanced XP3F technology to a tier.
Also we plan to complete the qualification of the optimized second X ball resonator for a key customer and the timing control market.
And we expect to deliver an X band Paul filter utilizing acoustic <unk> advanced X P. Three F technology.
To a tier one defense customer and now I would like to hand, the call over to Ken to go through our financial highlights.
Speaker 3: And now I would like to hand the call over to Ken to go through our financial highlights.
Thank you Jeff.
Speaker 2: For the first quarter ended September 30th, 2023, the company reported revenue of $7 million, which is a decrease of 16% over the prior quarter ended June 30th, 2023, but still represents an increase of 26% year over year.
But the first quarter and at September 30th 2023, the company reported revenue of $7 million, which is a decrease of 16% over the prior quarter ended June 30th 2023 but still represents an increase of 26% year over year.
Speaker 2: On a GAAP basis, operating loss was $21.7 million for the September quarter, driven by revenue of $7 million, offset by labor costs of $9.4 million, depreciation and amortization of $3.2 million, and other operational costs totaling $16.1 million. As a result, GAAP net loss per share was $1.8 million.
On a GAAP basis operating loss was $21.7 million for the September quarter, driven by revenue of 7 million offset by labor costs of $9 4 million depreciation and amortization of $3 2 million and other operational costs totaling $16 1 million.
As a result, GAAP net loss per share was 28 cents.
Speaker 2: On a non-GAAP basis, operating loss was $19.1 million, and non-GAAP net loss per share was $0.27.
On a non-GAAP basis operating loss was $19 1 million and non-GAAP net loss per share was 27 cents.
Speaker 2: CapEx spending for Q1 was $4.2 million, primarily to enhance our back-end processing capabilities and complete our New York FAB tool capacity to 500 million filters per year.
Capex spending for Q1 was 4.2 million primarily to enhance our back end processing capabilities and complete on New York Fab talks capacity to 500 million filters per year.
Speaker 2: Cash used in operating activities was $13.1 million, which included approximately $3.4 million of year-end expenses for $9.7 million net. In a December quarter, as indicated in our prior call, we expected revenue to be flat given the broader market weakness, along with the associated inventory correction. We continue to receive design wins and introduce new products, but we expect a return to record quarterly revenue in the March quarter of up 18 to 25%. We'll update this guidance during our next.
Cash used in operating activities was $13 1 million, which included approximately $3 4 million of yearend expenses for $9 7 million net in the December quarter as indicated in our prior call. We expected revenue to be flat given the broader market weakness along with the associated imagery correction.
We continue to receive design wins and introduced new products that we expect a return to a record quarterly revenue in the March quarter of up 18% to 25%.
We will update this guidance during our next quarterly Investor call.
On the expense front over the past several months, we've undertaken significant expense reductions and cost saving measures that we estimate will reduce our operating cash flow burn rate below $8 million for the December quarter.
Speaker 2: On the expense front, over the past several months we have undertaken significant expense reductions and cost-saving measures that we estimate will reduce our operating cash flow burn rate below $8 million for the December quarter.
Speaker 2: Given the top line projections, the CHIPS ITC refund, and a full quarter of cost savings, we currently expect Operating Cash Burn to be below $6 million in the March quarter, with Operating Cash Flow break-even less than one year away.
Given the topline projections the chips I T C refund and a full quarter of cost savings. We currently expect operating cash burn to be below $6 million in the March quarter with operating cash flow breakeven less than one year of life.
Speaker 2: The company exited the September quarter with $25.8 million of cash and cash equivalents versus $43.1 million at the end of the previous quarter. I will now turn the call back over.
The company exited the September quarter, with $25 8 million of cash and cash equivalents versus $43 1 million at the end of the previous quarter.
I will now turn the call back over to Jeff for his closing comments. Thank you can.
Speaker 3: Thank you, Ken. We continue to believe the market opportunity for our patented high-frequency XBOL and XP3F filters is substantial.
We continue to believe the market opportunity for our patented high frequency ex ball and X P. Three F filters is substantial.
Speaker 3: As of September 25th, 2023, we have approximately 200 issued patents and patents pending, representing a substantial IP moat around our technology.
As of September 25th 20, twenty-three, we have approximately 200 issued patents and patents pending representing a substantial IP moat around our technology.
Speaker 3: We continue to work diligently to achieve each of our stated objectives, and we will continue to provide updates on our execution against these objectives going forward.
We continue to work diligently to achieve each of our stated objectives and we will continue to provide updates on our execution.
Against these objectives going forward.
Speaker 3: I want to emphasize to investors that while we have been navigating the challenges to our top-line revenue during the first half of our fiscal year, we have aggressively taken steps to reduce operating expenses and achieve cost savings on our products to lower our operating cash burn.
I want to emphasize to investors that while we have been navigating the challenges to our topline revenue during the first half of our fiscal year, we have aggressively taken steps to reduce operating expenses and achieve cost savings on our products to lower our operating cash burn.
Speaker 3: We believe this is prudent in the economic environment that we are facing.
We believe this is prudent and the economic environment that we're facing.
Speaker 3: Finally, I would like to take the opportunity to thank our employees for their hard work, passion, and dedication in working together to position our company for growth in the quarters ahead.
Finally, I would like to take the opportunity to thank our employees for their hard work passion and dedication and working together to position our company for growth in the quarters ahead.
Speaker 3: I also wish to thank our shareholders who continue to support the company. And with that, I would like to open the call for questions from the investment community. Operator, please go ahead with the
I also wish to thank our shareholders, who continue to support the company.
And with that I would like to open the call for questions from the investment community.
Operator. Please go ahead with the first question.
Thank you.
At this time, if you'd like to ask a question you May press star one from your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Speaker 1: At this time, if you'd like to ask a question, you may press star 1 from your telephone keypad. A confirmation tone will indicate your line is in the question queue.
You mean, if I start to feel like to move your question from the queue.
Speaker 1: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Thank you.
Speaker 1: Our first question is from the line of Anthony Stass with Craig Howell.
Our first question is from the line of Anthony Stoss with Craig Hallum. Please proceed with your questions.
Speaker 3: Morning guys, can let me start with you. Can you maybe outline op ex just for December and then March R and D and S, G and a for each and then your comment about expected reach break even in less than a year. What would the new kind of revenue per quarter to reach that break even?
Good morning, guys, Ken Let me start with you can you maybe outline Opex just for December and then March R&D and SG&A for each and then.
Your comment about expect to reach breakeven in less than a year, what would the new kind of revenue per quarter to reach that breakeven would be.
Good morning, Tony.
Speaker 2: Morning, Tony. Yeah, I'll dive into some of those answers for you.
David.
The answers for you.
Speaker 2: So with the expense reductions and cost saving measures that we've undertaken, in essence we've cut about 20% of our operating expense.
So with the.
With the expense reductions and cost saving measures that we've undertaken.
And as soon as we are.
It's about 20% of our operating expense.
Speaker 4: We won't see a full quarter of that until the March quarter, as some of those were undertaken earlier in Q2. So we'll start to see up to 10 to 20% in December , and then in March, 20% savings and OPEX overall. The question on operating cash flow breakeven, we still are projecting that to be within the next 12 months.
We won't see a full quarter of that.
March quarter as somebody was one undertaken earlier in the in Q2.
So we'll see.
Starting to see up to 10% to 20% in December and then enlarge 20% savings in Opex overall.
A question on operating cash flow breakeven.
We still are projecting that to be within the next 12 months.
Still lived in.
$12 million to $15 million revenue during that time period, and that's something that depends on yes, we are.
Speaker 4: 12 to 15 million of revenue during that time period and some of that depends on mix. We are... A number of our new products are coming into production during the next two quarters, over a dozen, and those products are of a lower form factor and have lower laminate costs and back-end processing costs.
A number of our new products are coming into production over the next two quarters.
Over a dozen.
Those products are of a lower form factor in that lower laminate Austin backend processing cost.
Speaker 4: So we'll start to see not only a reduction in the overall cost from the cost savings plan that we did, but also an introduction of our new parts that are lower back end in cost. And those margins are where now negative will turn positive. And then by this time next year, we project to be operating cash flow break even.
We will start to see a lot only.
The reduction in overall costs.
Cost savings plan that we did but also an introduction of our new parts that are lower backend cost and those margins are not where now negative will turn positive and then buy.
This time next year, we project to be operating cash flow breakeven.
Got it and then as a follow up maybe for Jeff just what gives you confidence in the 8.3 to 8.8.
Speaker 3: Got it. And then as a follow up, maybe for Jeff, just what gives you confidence in the 8.3 to 8.8 million in March, and then again, ramping from there to get to your 12 to 15 million. And then, you know, Jeff, or can again, where would you expect gross margins to kind of exit calendar twenty twenty.
8 million in March and then again ramping from there to get to your $12 million to $15 million.
And then either Jeff or Ken again, where would you expect gross margins to kind of exit calendar 'twenty 'twenty four.
Good morning, Tony.
Speaker 3: Good morning, Tony. Jeff here. I think the confidence is coming from what we're seeing. We made in the prepared comments some discussion about what we're seeing in the Wi-Fi channel with inventories.
The confidence is coming from.
We're seeing we made in the prepared comments some discussion about what we're seeing in Wi Fi channel.
With inventories.
Speaker 3: particularly in the Asia market, in our Wi-Fi segment clearing. We've seen firsthand some of the evidence of that. I think most importantly, and maybe more importantly, is that we have multiple programs that we've been focused on, which are ramping in the Q1.
The Asia market Wi Fi segment, clearly, we see we've seen firsthand some of the evidence of that I think most importantly, and maybe more importantly.
We have multiple programs that we've been focused on which are ramping in Q1.
Speaker 5: calendar year, which is our March quarter, of course.
Calendar year, which is our March quarter of course.
Speaker 5: So, it's confidence in the transition of some programs in Wi-Fi. We also made mention of some transition in our defense and other segment.
So it's just kind.
And the transition.
Some programs in Wi Fi.
Also made mention of some transition.
Yeah.
Segment.
Speaker 5: We had really had a perfect storm the first half of this fiscal year with
We had really had a perfect storm.
First half of this fiscal year.
Speaker 5: Some of the headwinds in the market with we were wrapping up certain contracts. So that's as well as the
Some of the headwinds in the market.
We were wrapping up certain contracts as well as the.
Speaker 5: you know, some of the slowdown in the inventory build up in the channel. So, for the March quarter, it's, you know, it's all about new programs in Wi-Fi, which we have high confidence in, as well as the defense and other segments really picking up.
Some of the slowdown in the inventory buildup in the channel so for the March quarter. It's you know it's all about.
New programs and Wi Fi, which we have high confidence in.
As well as.
There's another segment that really picking up.
Speaker 5: And you know the infrastructure segment's been a little lumpy, but we we've seen some signs of You know an ongoing recovery in that as we head into next year
And.
The infrastructure sector has been a little lumpy.
We've seen some signs.
I don't want to recovery.
As we head into next year.
Speaker 4: And Tony, I'll comment on gross margins. So in the next quarter or two, by March, we will turn positive margins.
Okay, Tony I'll comment on gross margin so I'm in the next quarter.
Quarter four two by March we will turn positive margins.
Speaker 4: and then exit our fiscal year above 10% margin. And then when we come to the operating cash flow break even time period of this time next year, we're projecting to be 20% to 25% of the positive gross margin. And some of that, as Jeff just alluded to, is some of our product mix.
And then exit our fiscal year above 10% margin and then when we come to it.
Operating cash flow breakeven time here. This time next year, we're projected to be 20% to 25%.
Positive gross margin.
Some of that as Jeff just alluded to is some of our product mix.
Speaker 4: We're also starting to see more interest in infrastructure and some of our base station products. So those, if you recall, have a very high ASP and very good margins. So that is a piece of the mix that we're talking about when we're going into those time periods in the future. All right.
We're also starting to see more interest in infrastructure, it's where our base station products. So.
If you recall has a very high eights.
Good margin so.
That is a piece of the mix that we're talking about getting.
Giving into those time periods in the future.
All right very good thanks, guys.
Okay.
Speaker 1: Thank you, Tony. Our next question is from the line of Craig Ellis with B Riley Securities.
Our next question is from the line of Craig Ellis with B Riley Securities. Please proceed with your questions.
Yeah. Thanks for taking the question guys. So I wanted to follow up on the earlier questions and just better understand the dynamics in March so it looks like revenue is going to be up.
Speaker 6: Yeah, thanks for taking the question, guys. I wanted to follow up on the earlier questions and just better understand the dynamics in March. So it looks like revenue is going to be up about 1.3 million sequentially, led by Wi-Fi followed by defense. Within Wi-Fi, can you characterize the incremental gains in the consumer part of the market versus the enterprise part of the market for the March quarter?
About 1.3 million sequentially led by Wi Fi followed by defense within Wi Fi can you characterize the incremental gains in the consumer part of the market versus the enterprise part of the market.
For the March quarter.
Speaker 7: And good morning, Craig. Let me pull Dave in and he can give you kind of what we see on the mix and Wi-Fi. Maybe I'll have some comments thereafter. Yeah, good morning, Craig. Morning, Dave.
Good morning, Craig let me pull data engine.
What we see in the mix and Wi Fi.
Comments thereafter.
Right. So it's funny that evenly split.
Speaker 7: between the consumer side and the enterprise side. There's two dynamics that we're seeing. So we've gotten good traction with Wi-Fi 6E programs that we've done with carrier markets.
Evenly split between the consumer side of the enterprise side.
There's two dynamics that have received so we've got good traction with Wi Fi six <unk> programs that we've done with carrier market that is going to start picking back up it's gone through this inventory slowdown so we expect that to pick back up.
Speaker 7: that is going to start picking back up. You know, it's gone through this inventory slowdown, so we expect that to pick back up. Plus, we've got, per the Design Win announcement we made in this recent call today, is that we've got two consumer programs that we've already seen substantial POs on for new Wi-Fi 7 products that we launched probably about three, five months ago.
Plus we've got a pretty design win announcement, we made in this.
The call today is that we've got two consumer programs that we've already seen substantial pews on four new Wifi seven products that we launched probably about three five months ago.
Speaker 7: And then the other one is, you know, our tier one enterprise customers going to start ramping and also their previous platform is picking back up. They've had a slowdown probably for the past six months.
And then the other one is.
Our tier one enterprise customer is going to start ramping and also their previous platform is picking back up and they've had to slow down probably for the past six months. So we have you know both of those coming together plus we announced in the call today. Another enterprise customer that's also going to be.
Speaker 7: So we have, you know, both of those coming together. Plus we announced in the call today another enterprise customer that's also, you know, going to be planning to ramp, and both of these enterprise customers have a significant amount of filter content per system. So even though the volume of the system shipping are less than the carrier side, you still get very good dollar content and also total ASP per system.
Planning to ramp in both of these enterprise customers have a significant amount of filter content per system, even though the volume of this system is shifting or lessen the carrier side, you're still getting very good dollar content.
And also the total ASP per system.
Speaker 7: So I think it's going to be a balance between the two of them. We're still focusing on the big box retail side, that we don't expect any real growth contribution probably until the second half of calendar year 2024. So I put emphasis mainly on the carrier and the enterprise side.
I think it's going to be a balance between the two of them.
Still.
Focusing on the big box.
Joe.
We don't expect.
Any real road contribution probably until the second half.
Calendar year 2024.
This is mainly on the carrier.
Speaker 6: Yeah, that's really helpful, Dave. Thank you. And then the follow-up question is somewhat similar, but for the second half of calendar 24, first half of fiscal 25, guys, if we're getting to cash flow break-even at mid-teens revenues, then our revenues are going to basically double through the year. So can you just help us understand what your assumptions are around mobile's contribution?
Yeah. That's really helpful. Thank you and then the follow up question is somewhat similar but for the second half of calendar.
24 first half fiscal 'twenty five guide, if we're getting to cash flow breakeven at mid teens revenues than.
Our revenues are going to basically double through the year or so.
Can you just help us understand what your assumptions are around mobile contribution about Ram.
Speaker 6: to that RAM, and to the extent that it exists, how much of that is Tier 1 customers versus the Tier 2, the tramping a little bit in the first half of calendar 24, and then beyond mobile, just the relative contributions out of Wi-Fi, defense, et cetera.
The extent that it exists how much of that is sure one customers versus the tier two it's ramping a little bit in the first half of calendar 'twenty four and then beyond mobile just the relative contributions out of Wi Fi.
Thank you.
Okay great.
Speaker 5: Okay, Craig, so, you know, second half of second half of calendar.
Second half of <unk>.
Second half.
Uh huh.
Speaker 5: You know, we see continued increase in transition in Wi-Fi. I think Ken had touched on some of the new products with a more favorable gross margin profile. That's going to be certainly a driver towards a cash flow break even. But it's continued ramp with programs in Wi-Fi. Dave gave some outline of what that looks like in terms of some of that mix.
Our 2024.
Yeah, we see continued.
Great.
Transition and Wi Fi I think Kevin touched on some of the new products with a more favorable.
Margin profile, that's going to be certainly a driver towards.
Our cash flow breakeven.
It has continued to continued ramp with programs.
Wi Fi they gave some outline of what that looks like in terms of.
Some of that mix.
Speaker 5: I did want to emphasize in these Wi-Fi programs, we're moving from programs that we may have 8 to 10 type filters.
I did want to emphasize Wi Fi programs.
Moving from our programs.
They have.
Eight a eight to 10 type filters.
Speaker 5: in a Wi-Fi 6E to some of these programs.
And our Wi Fi six feet to some of these programs.
Have multiple products and up to a more than 30 filters of content in the box. So Wi Fi is a big part of that story.
Speaker 5: up to more than 30 filters of content in the box. So Wi-Fi is a big part of that story. The other part that we're seeing is, we do see a recovery of network infrastructure as we go in the second half of 2024. We announced this morning a first massive MIMO design win in infrastructure. That has, you're talking about, in that particular design win, 128 filters in that, was significant.
The other part that we're seeing is we do see a.
Our recovery.
Network infrastructure as we go into the second half of 2024.
This morning, our first massive mimo.
<unk>.
And infrastructure that has.
Youre talking about and in that particular design win.
Speaker 5: 128 filters in that with significant content in that and the defense and others
Mm 128 filters and that was significant.
Content.
And the defense and others.
Speaker 5: segment which is core and key to us, continued strength there. We have new programs that we've been bidding. We did announce a second support of a second DARPA program there as well as
Segment, which is.
<unk> to us.
Continued strength there we have.
New programs.
We've been bidding we did announce it.
Our support of a second DARPA program there as.
As well as.
Speaker 5: As well as some ramp in the in the automotive we've been active in the automotive Not only in the battery management, but also in the
As well then.
Some ramp in the in the automotive we've been active in the automotive.
Not only in the.
Battery management, but also in <unk>.
Speaker 5: CB2X, we've been very active marketing that product as well. You asked about 5G mobile. Our activity there is primarily in the tier 2 market. I think it's well documented, the headwinds that have been in the China segment. But our activity there that's supporting this is primarily in the tier 2 market. Anything else you want to add?
<unk>, we've been very active marketing.
Well you asked about.
Oh, well that to me there is primarily in the tier two.
So I think it's well documented the headwinds.
That has been in the.
Chinese segment.
All activities are supporting this is primarily in the tier two market anything else you want to.
Speaker 7: No, I was just going to comment. We're still very excited about the mobile market. We've got a handful of customers that are active. It's just certain dynamics that we're encountering right now. So I agree with Jeff's comment, is most of the revenue increase we'll see in the second half of 24 is going to be with the Tier 2 market. We hope with the activity that we'll see opportunities back in with Tier 1 in 2025, 2026.
No I was just going to come out of it we're still very excited about the mobile market.
We've got a handful of customers that are active its just a certain dynamics at work right now so I agree with Jeff's comment is most of the revenue increase we will see in the second half of 'twenty four is gonna be was tier two market.
We hope with the activity that we'll see.
Cities, Yeah, backend with the tier one and 2025 2026.
Speaker 7: But that's something that we've got to continue to push with our Tier 1 customers that we're engaged with.
But that's something that we've got to continue to push with our.
Tier one customers that we're engaged.
Speaker 6: That's really helpful, guys, and then lastly for me before I get back to you, Ken, my connection was breaking up as you talked about the timing of what I believe was a $4 million ITC refund. When do you expect to realize that?
That's really helpful guys.
Let me before I get back.
I can my connection was breaking up because you talked about the timing.
I believe it was up $1 ITC refund when do you expect to realize.
Okay.
Speaker 4: Hey, Craig. So, yeah, so we, uh, that's actually over an 18 month period, three and a half to four million dollars.
Thanks, Greg So yes, so we yes, that's actually over an 18 month period, three and a half to $4 million.
Speaker 4: That will be filed with our tax return this year and our tax return next year.
That will be filed with our tax return this year no taxes for next year.
Speaker 4: And then it's a projection of when we expect to get a refund from the IRS, how long that may take.
This projection of when we expect to get a refund from the IRS how long it may take but we would expect the first tranche of that to be.
Speaker 4: But we would expect the first tranche of that to be, roughly about half of that, a little over one and a half to two million dollars for this upcoming time period, and we expect that to occur in the March quarter, March of 2024.
Roughly about half of that a little over one and a half to $2 million for this upcoming.
And we expect that to occur in the March quarter.
March of 'twenty 'twenty four.
Yeah.
Got it thanks Scott.
Speaker 1: Thank you. Our final question is from the line of Suji De Silva with Ross.
Hi, Greg.
Thank you. Our final question is from the line of Suzhou Sofa with Ross M. Kam. Please proceed with your question.
Speaker 4: Hi Jeff, Dave, and Ken. The product cost improvements you talked about in terms of improving the margins and the laminates and so forth, what mix of the products as we go 6 to 12 months out will be at that improved cost structure to target getting to break-even?
Hi, Jeff, Dave and Ken I'm, the the product cost improvements you talked about in terms of a prudently proving that the margins in the lemon and so forth what mix of the products as we go six to 12 months out we'll be at that improved cost structure.
Its a target getting to break even.
Speaker 7: Morning, Suji. We'll get both Dave and Ken on that. One from the product and obviously one from the numbers and financials. Morning, Suji. So, you know, there's, I would say that the mix right now, you know, for the next, you know, quarter, quarter and a half is going to be more of the older products.
Uh huh.
Both Dave and Ken.
Once the product obviously from the numbers our financial morning, Tsuji. So it's.
Yeah. There is I would say that the mix right now for the next quarter.
Quarter warehouse is going to be more of the older products.
Speaker 7: But as we get the new products profiles ramping, you'll see that transition point probably
As we get the new products ramp and you'll see that transition point probably.
Speaker 7: You know, three quarters out that you will start to see it move through that the new products will take a higher percentage. And then, you know, by the, I guess, 12 month period, I would expect, you know, the majority of the products that we're shipping are a good chunk of it's going to be, you know, the new platform, the smaller form factor.
Three quarters out that you will start to see it moving through that the new products will take a higher percentage.
Yeah, Bobby I guess 12 months period, I would expect the majority of the products that we're shipping or a good chunk of it is going to be the new platform the smaller form factor.
Speaker 7: A lot of the 6E and even the 6 programs are getting replaced, you know, with the 7, at least with the customers that we're targeting. We'll have some legacy products that continue to ship. Some of the enterprise customers, you know, they'll be utilizing, you know, these older generation products for, you know, two to three years out. So it's a transition period. It's baked into Ken's models, too, as well, that he can touch on.
Yeah, a lot of the 60 and even the six programs are getting replaced.
And at least with the customers that we're targeting well have some legacy products or continue to ship some of the enterprise customers.
There'll be utilizing these are these older generation products for two to three years out. So it's just it's a it's a transition period and it's baked into our models as well as you can touch on.
Yeah. So we are like I said, there's about over a dozen new products that we're introducing.
Speaker 4: Yep, so we, like I said, there's about over a dozen new products that we're introducing over the next three to nine months.
Next three to nine months, and then waterfall after that and as Dave mentioned slowly be be accepted by the market and be brought into our into our sales funnel.
Speaker 4: and then more to follow after that. And as Dave mentioned, they'll slowly be accepted by the market and be brought into our sales funnel. And as I mentioned earlier, there also is the new base station products.
And as I mentioned earlier there also is a.
Base station products and those have a higher ASP.
Speaker 4: And those have a higher ASP and have a lower cost as well. So.
S as well so yeah, we'll start to see that suddenly more and then.
Speaker 4: We'll start to see that funnel in more and then get to 25% gross.
To get to 25% gross margin in that range. When he gets you. This time next year.
Speaker 5: in that range when we get to this time next year in the end of December quarter. And Suji, let me, this is Jeff, let me add to that really three dynamics that's going on on that margin improvement. Dave touched on the size.
And so this.
This is Jeff let me add to that really three dynamics that's going on.
The margin improvement.
Dave touched on the size of the laminate.
Speaker 5: The laminate has, or selection of laminate to lower cost laminates is certainly a selection criteria. And I do want to emphasize the work by the team in the yield.
Our selection of laminate to lower cost laminates is certainly our selection criteria.
And I do want to emphasize the work by the team and the yield.
Speaker 5: categories that so bags
Category.
So it was size of product laminate as well as on the yields.
Speaker 5: size of product, laminate, as well as the yields that's going to be driving gross margin going forward.
Gonna be driving gross margin going forward.
Okay, Great guys. My other question is on the financial side, what's the Capex budget expected maybe the next 12 months calendar 'twenty for whatever time frame you want to use just to understand how capital intensive next phases.
Speaker 8: Great, guys. My other question is on the financial side. What's the CapEx budget expected, maybe the next 12 months, calendar 24, whatever time frame you want to use just to understand how capital-intense the next phase is?
Yeah. So we are we've just completed our $500 million Apache expires.
Speaker 4: So we just completed our 500 million capacity, 500 million filters per year capacity expansion and also beefed up some of our back-end processing capabilities in this quarter. If you look at our financials, you'll see a footnote disclosure stating about a million dollars of spend that is left.
If I hadn't really filters per year capacity expansion and also beefed up some of our back end.
Assets and capabilities and this quarter. If you look at our financials, you'll see a footnote disclosure, stating about a million dollars of spend that is left them. However, I would also tell you that where we're looking to yeah. We're looking into it and see what expenses, we can defer or or not too from that angle.
Speaker 4: However, I would also tell you that we're looking to...
Speaker 4: You know, we're looking into it and seeing what expenses we can defer or not do from that angle as well as far as a further cost reduction program. But at most, if you look at our footnote, it's a little over $1 million for the next 12 months.
Those wells Fargo's further cost reduction program, but yeah.
Yeah.
If you look at our footnote, it's a little over $1 million for the next 12 months.
Speaker 5: And, Suji, let me add to that, that, that tool capacity expansion, those tools are.
And so just to add to that.
That tool capacity expansion those tools are.
Speaker 5: predominantly installed and running.
Predominantly installed and running.
Speaker 5: We have deferred on some of the labor as we've been able to make strides in yields, and that's put some of the labor component that's driving.
We have deferred some of the labor as.
As we've been able to make strides in yields and that's that's put some of the labor component.
Driving.
Speaker 5: Some of that cost of goods, let's push some of that out.
Some of that cost of goods.
Some of that out and that's.
Speaker 5: And that's part of what Ken's referencing in terms of some of the savings programs. So we've got the tool capacity and can add the labor and bring that trained up generally speaking in one to two quarters.
Part of what Kevin said.
Referencing in terms of some of the savings program. So we've got a tool capacity.
And the labor and bring that trained up generally speaking in a one to two quarters.
Okay, Alright, thanks, guys.
Yeah.
Speaker 1: Thank you. This concludes our question and answer session. I'll now hand the floor back to management for closing.
Thank you. This concludes our question and answer session I will now hand, the floor back to management for closing remarks.
Speaker 5: Thank you operator and thank you all for your time today. We look forward to speaking with you during our next update call to discuss the current quarter execution against our milestones as well as against future expectations. Thank you again and wish everybody a wonderful week. Thank you.
Thank you operator, and thank you all for your time today.
Look forward to speaking with you during our next update call to discuss the current quarter execution against our milestones as well.
Against future expectations. Thank.
Thank you again and wish everybody a wonderful week. Thank you.
Speaker 1: This will conclude today's conference. You may disconnect your lines at this time. Thank you for your.
This will conclude today's conference you may disconnect. Your lines at this time. Thank you for your participation.