Q2 2019 Earnings Call
Good afternoon, and welcome to Threed systems Conference call, an audio webcast to discuss the results for the second quarter of 2019.
My name is Jeremy and I will facilitate the audio portion of today's interactive broadcast.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
At this time I would like to turn the call over to Stacey Witten, Vice President Investor Relations Threed systems.
Good afternoon, and welcome to Beauty systems Conference call I am Stacey Witten and with me on the call our Vms Joshi, our President and Chief Executive Officer, John Mcmullen, Executive Vice President and Chief Financial Officer, There are buckets her assistance.
The webcast portion of this call contains a slide presentation will refer to during the call. Those following along on the phone who wish to access the slide portion of this presentation. They do it on the Investor Relations section of our website.
Participants, who would like to ask questions at the end of the question related to matters discussed in this conference call should call in using the phone numbers provided on this slide and in the press release, we issued today.
So this is access assuming of course the webcast.
Please be aware there may be a few second delay and you will not be able to pose questions via the web.
The following discussion or responses to your questions reflect managements views as of today only and will include forward looking statements as described on the slide.
Actual results may differ materially additional information about factors that could potentially impact our financial results is included in today's press release, and our filings with the FTC, including our most recent annual report on Form 10-K .
During this call we will discuss certain non-GAAP financial measure.
In our press release and slides accompanying this webcast, which are both available on our Investor Relations website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to comparable GAAP measure.
Finally, unless otherwise stated all comparisons on this call will be against our results for the comparable period of 2018.
Now I'm pleased to turn the call over to BMS Joshi, our CEO [laughter]. Thanks, Stacy good afternoon, everyone.
GAAP revenue in the second quarter was $157.3 million and non-GAAP revenue was $156.4 million and printer unit sales increased 46.4% from the prior year.
Expected revenue headwinds continued this quarter based on the ordering patterns of a large enterprise customer.
And the pause we have taken on factory metal systems, as we complete technical enhancements to ensure the quality and reliability levels meet our expectations for high volume production environment.
Additionally.
We saw weaker macroeconomic conditions.
Particularly in Europe .
And the automotive sector impacting both printer shipments and our on demand services.
All in all our new products continue to be well received.
And we are on track to begin shipping exciting new production materials.
During the second half of this year, which we believe will significantly expand our growth opportunities in plastic printers going forward.
Although we did not ship DMP factory metal systems during the quarter.
We are making good progress on the technical enhancements and we continue to see.
So all in demand and positive customer feedback for our DMP Flex 350 systems.
Gross profit margin improved sequentially for the second quarter as a result of lower cost of sales.
And revenue mix.
Operating expenses declined as a result of our cost reduction plans beginning to take hold.
As discussed over the past couple of quarters.
I'm pleased.
With our progress here and we will continue to be laser focused on cost reduction opportunities in the second half.
To offset short term revenue headwinds.
While at the same time moving to an appropriate cost structure for the long term.
For the second quarter of 2019, we reported non-GAAP earnings of zero cents per share and GAAP loss of 21 cents per share.
Now, let me turn it over to John .
To discuss more details on the second quarter of 2019, John Thanks, BJ good afternoon, everyone.
For the second quarter, we reported GAAP revenue of $157.3 million, a decrease of 10.9% compared to the second quarter of 2018.
GAAP gross profit margin was 46.6% compared to 48.8% in the second quarter of 2018.
GAAP operating expenses decreased 1.5% to $92.5 million, we reported a GAAP loss of 21 cents per share in the second quarter of 2019 compared to a loss of eight cents per share in 2018.
We reported non-GAAP earnings of zero cents per share in the second quarter of 2019 compared to six cents per share in the second quarter of 2018.
During the second quarter printer unit sales increased 46.4% driven primarily by sales of our figure for platform printer revenue decreased 27.4% to $30 million driven by year over year timing of a large enterprise customers orders our decision not to ship DMP factory solutions during the quarter and the softer macroeconomic industrial environment.
Printer unit sales revenue mix and overall average selling price will likely continue to fluctuate as we ramp sales of new products at a wide range of prices and as macro uncertainty and current slowdown and large capital purchases continues.
Materials revenue decreased 8.5% to $41.2 million in the second quarter as we discussed last quarter, we have been experiencing a decline in legacy materials at a faster rate than materials growth related to core and new systems. We continue to believe those trends begin to flip this year and we expect to have year over year materials growth in the second half of 2019.
Healthcare services and simulation revenue increase but the impact of the large customers order timing offset those increases in total healthcare revenue decreased 8.1% to $56.4 million.
Excluding the large enterprise customers orders from each year healthcare revenue increased 11.4%.
We continue to be pleased with the overall demand trends for health care, including our next 10 5100 Threed printer.
On demand manufacturing revenue decreased 12.4% to $24 million in the quarter as we discussed last quarter, we expected headwinds through the second quarter related to the business adjustments connected to export compliance and outsourcing changes. We also experienced additional weakness from automotive and European customers in the second quarter.
Software revenue, including haptics, and scanners decreased 2.5% to $25.1 million in the second quarter, primarily as a result of lower semitropical product revenue driven by weakness in automotive.
While quarterly performance May fluctuate, we continue to expect growth from software long term and are taking actions to improve software growth rates and enhance our software portfolio.
Despite the revenue headwinds we are currently experiencing we continue to expect long term growth in printers materials healthcare and software.
We reported GAAP gross profit margin of 46.6% in the second quarter of 2019, a 220 basis point decrease from the prior year non-GAAP gross profit margin in the second quarter of 2019 was 47.4% 150 basis point decrease from the prior year, but a 320 basis point improvement sequentially as a result of revenue mix and improved cost absorption.
We continue to drive supply chain optimization manufacturing efficiencies and process improvements, but with inventory reduction actions and lower production plans at our manufacturing facilities. We continue to expect gross profit margins to be in the mid fortys range throughout the balance of this year.
GAAP operating expenses for the quarter were $92.5 million, a decrease of 1.5% compared to the second quarter of 2018, including a 0.7% increase initiated expenses and an 8.4% decrease in R&D expenses.
non-GAAP operating expenses in the second quarter were $71.7 million, a 9.3% decrease from the second quarter of the prior year and a 1.7% decrease sequentially.
We are beginning to see the results of the actions, we are taking to accelerate cost reductions and lower overall cost structure.
Compared to the 2018 quarter non-GAAP issue DNA expenses decreased 9.3% to $51.2 million.
non-GAAP R&D expenses decreased 9.2% to 20.5 million.
While there is continued uncertainty in the macro environment. We are focused on what we can control, reducing our cost structure by continuing to drive efficiencies lower headcount and reduced cost of sales and operating expenses, while prioritizing investments to drive profitable growth with these actions going forward, we expect to keep non-GAAP operating expenses relatively flat.
We generated $18.7 million of cash in operations during the second quarter, we ended the quarter with $150.4 million of unrestricted cash on hand.
We improved working capital performance during the second quarter, including improved DPL and DSL, while at the same time, reducing aggregate inventory levels.
We also reduced cash capital spending during the second quarter, the $5.6 million and expect to keep this lower rate of capex throughout the second half of 2019.
While cash use in generation will continue to fluctuate from period to period. We are very pleased with the cash results for the second quarter, we will continue reducing operating spend levels, improving working capital performance and tightly managing capital expenditures driving for organic free cash flow going forward.
With that I will turn the strong or turn the call back to VJ BJ.
Thanks, John .
We remain confident in the long term market opportunities we see.
For the company and are pleased with the early progress we are making with our cost structure.
We remain very focused on the bottom line performance of the company.
Given short term revenue headwinds.
But we are also optimistic for future growth.
Our expanded hardware portfolio has been well received.
And we are in the process of launching a number of new and very innovate new materials in support of production solutions, but at the same time, focusing even more on our software capabilities to drive to work flow solutions.
We are on track.
To take out an additional $10 million to $15 million of operating expense in 2019.
On top of our regional plans for this year as discussed in our last earnings call.
We also recently concluded the sale of the entertainment business.
The leaders of Entertainment Division have left Threed systems.
To continue to run the business as an independent company.
And we wish them all the best and look forward to partnering with them in the future.
In closing we remain confident in our broad portfolio added new capabilities.
Let it flow solutions and overall market opportunities.
And we remain keenly focused on executing on our strategy reducing costs.
And driving long term profitable growth.
And with that I would like to turn the call back to Stacey who will open the floor for questions. Stacy. Thanks, BJ, We will now open the call for questions. We ask you to limit yourself to one question and one follow up that's 900 to participate in the discussion as a reminder, please direct all questions to the teleconference portion of this call. The telephone numbers are provided again on this slide you are fine and by the U.S. and the number is 1877 407 eight to nine one and if you're calling outside the U.S. The number is 120 1689 athree format.
At this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
Our first question comes from the line of under the rule from Loop capital markets. Please proceed with your question on enough and on the Hey, Good afternoon, guys I appreciate the question.
I guess, both in line will be demand related could you guys talk.
How you've seen the demand environment shifts over the last 90 days so what's incremental that's the first part I'll ask the second part of the same time.
And just like it's sort of saying weaker macro you still put up a seasonal seasonal type quarter. I mean, you expect see you expecting similar typical seasonal patterns in the September and December quarter. Those are my two questions. Thanks.
Yes, I think first of the answering the last question, yes, we are expecting the seasonal.
The third and fourth quarter.
As far as the macro you know what we are seeing especially in Europe .
Seeing weakness in automotive sector.
And even automotive sector in China, and India also.
We are seeing a weakness.
And that impacts both our printers and on demand printing the audio DM business.
B.
I really feel that these are subtleties.
We need to really focus on our cost structure for that thing and the cash generation.
Okay, great. Thank you.
Thanks, a lot.
Our next question comes line of Jim Ricchiuti from Needham and company. Please proceed with your question.
Thank you good day gentlemen.
Hi, Vijay.
So I take it.
We are hearing quite a bit of.
Commentary around Europe , but from other companies. So if I look at.
Your geographic regions.
It looks like the US was down more and Asia was posted the biggest declines I wonder if you could talk a little bit about sure.
Contributing to the weakness in those two regions. Thanks.
So I think the first thing that we had already mentioned in last quarter's call.
The one of the biggest headwind we have is a little this big enterprise customer.
And net customer bought equipment.
Took place in Asia, and in Americas, and not in Euro. So now you have that headwind.
Which will really drive the Americas and Asian revenue decline in hardware in Europe , because a lot of healthcare is doing well, especially in our dental printer and the overall healthcare business like the medical simulator, which is based in Europe .
That's growing and when you have that growth offset by weakness in euro with OEM and our printer hardware.
Is the reason you are seeing that kind of the mix regionally for the company.
Yes, I'm not sure you can answer this you did it in the health of your discussion around health care, specifically, but if you look at the U.S. and Asia Pacific regions and.
Parse out the revenue from this large customer.
What are we looking at in terms of the.
The the business trends.
Most of the business trend in Asia is weak, yes, because.
As I said earlier.
China, India and the.
Overall automotive sector in China.
His ended period.
There is also is really impacting our Asian business.
In Americas.
I think because the growth.
Generally.
It comes from a lot of.
The software.
And.
The health getting you know that's what is offsetting so if you take out if you just take a step back and look at our printers and materials business.
Without the big.
Enterprise account Americas did better than Europe and Asia.
Okay. That's helpful. Thank you.
Our next question comes line of one Masimo Hong from Bank of America Merrill Lynch. Please proceed with your question.
Hi, slow and see.
Hey, Jay.
If we look at the the materials trajectory comments right I mean down 8%.
In revenues and volumes were down or 11%.
What is accounting for the sharp drop off and I know you made some comments around that turning around in the back half. So can we also get a look in this quarter of how much.
The drag of these legacy products was and how what the true underlying trajectory is excluding that.
Yes, I think I think we.
I'm feeling very comfortable letting slip in the second half of 2019, because when we look at it.
Install base of legacy and the new printers, and there we see the materials coming from those printers, because that's very important to really understand the installed base.
And really understand where the material to revenues coming from starting third quarter, and then really getting into 2020, we think that it will really be a very different kind of the profile of our materials mix, which will come more from over four and new products versus legacy and that gives us the bond funds and as you flip starting in second half and continuing 2020.
We just can you just clarify that ill.
Currently in the in the in this current quarter that you just reported.
What is the what's the rough size of maybe the.
Materials revenue thats coming from legacy versus the EMEA, not breaking that down but as I, yes, I understand once you, but I really believe that the way we look at our current materials mix.
We feel very comfortable that we are going to show the growth in second half last last quarter Wanzhou, we kind of talked about that crossover right. We are seeing growth in our core and new products materials. This just a question of the crossover and so the confidence comes from our ability to see both both parts of the equation.
Okay.
And then just on Opex, if I could also ask.
You guys, obviously did a great job here in the quarter.
In sort of managing that Opex in this tough revenue and macro environment.
And it's.
I heard that you were going to keep opex relatively flat from these current levels is that is the right way to think about it into the back half so.
Yeah, Yeah, that's right lung I get like we said relatively flat I mean, we.
Yes, it's it's we've got two things going on right from from from an operating expense point of view, we're driving some actions.
We continue to to work hard on all the global functions.
Where where we see the opportunity, we're reducing headcount and perhaps more important longer term, we're driving more simplicity.
From a structural point of view in the R&D side of the world.
And I think we talked about this last quarter, we we really front end loaded and.
Compressed a lot of development efforts for all the products that we put out over the last 12 to 18 months. So there is a natural on this the natural fall off from an R&D point of view.
And our focus really this year has been on materials development, we mentioned that because we're making good progress as well as in the software space show. So R&D has kind of fallen off.
Naturally, but we're also looking at ways to be more efficient there. So so the flattish is typically we would see we would see an uptick in the second half opex.
With our with our seasonal revenue patterns, but we believe the actions that we are doing continue to do throughout the second half and beyond.
Will enable us to stay relatively flat so as we talked about in the last quarter.
Paul.
We are simplifying the organization with the two business models. We could this is very very important for the company and when you simplify youre able to take cost out two of the company, especially in SGN is so the approach that we are taking is really developing those platforms and now focusing on the annuity stream based materials and software R&D and then simplifying the company so that.
We can take the Pos out of SGN today and that is the result that we got nine person reduction.
The year over year, and we just need to continue to do that.
Our next question comes from the line of Troy Jensen from Piper Jaffray. Please proceed with your question.
Yes, I think your question Andy Hi, John .
Hey, can you talk a little bit about the new materials are those pretty interesting.
So any more you can say about it and just have one follow up on that.
Yes, so that was sort of some new materials that we are developing.
Our focus is on production, we absolutely believe that we never figure for platform. When you have the right materials and the right platform and the right kind of software, yes, seeing incredible pickup in the market like dental product. So we believe now photo will stand alone and a little modular product, we're going to introduce new products.
In materials like.
It's tough black material, which will have capability with the UBI.
Stability and we could use for the end user park will help biocompatible material that we are introducing which I absolutely believe with our healthcare focus will be very important for overdraft product. We are also introducing high temperature materials. So that we will be able to go.
In.
The automotive market on under the Hood applications, and we absolutely believe me I'm going to have world leading.
Production materials.
For these kind of use cases so.
This is what I, absolutely believe was the potential for a lower figure for that our platform and we started with our dental materials and now introducing these new products and materials.
Really sets up very well in 2020.
Okay, Perfect and then a quick one for John just on the gross margins at day up a lot here.
Despite materials declining as a percentage of revenues. So can you go through this a little bit more detail what drove such strong gross margins.
Yes, we do we had a we had a very strong sequential improvement and clearly part of that is sequentially from Q1 to Q2, there were some mix elements that helped us out.
Men and materials.
Materials stay relatively stable from a gross margin point of view quarter to quarter, a little bit down but.
We also we have been focused very hard over the last six to nine months fill scholtz and his team on driving down some of the fixed cost elements in the supply chain that were causing us to have under absorption issues.
Certainly the ones we saw in Q1, so so it's a it's two things it's mixed but it's also some good cost work by folks.
Based on lower volumes that were putting through and so it's a little bit of a balancing act right now because we are trying to bring inventory down at the same time, which can work against you right because you're not you're not utilizing those supply chain resources, but I think the team did a really good job in Q2, we put in for the second half we set an expectation of mid Fortys.
Yeah, I don't want I don't want us to get ahead of ourselves relative to what we saw in Q2 and and we'll see we'll see how Q3 plays out but but we made some we made some good progress.
Again, when we look at our cost structure, where could we look at both opex and cost of sales.
And I think it's really important for us to continue to focus on cost of sales and cash.
When we think about from the manufacturing partner.
Okay understood. Good luck in the second half.
Our next question comes the line of Greg Palm from Craig Hallum. Please proceed with your question.
Yeah. Thanks.
I guess, starting with the large enterprise customer by our math it was down something like 30 or 35% year over year. That's our estimate I don't know if you're willing to bless that but what are your expectations. There for the second half and I guess is your outlook of of that customer stays changed at all given some of their own recent commentary.
Well I think that customer is still.
Printing.
Half a million.
See any printed parts it today.
So we think that.
That customer is.
It's still doing really well there is always going to be that seasonality and then they will be buying the capacity for getting the new factory down and I think that's the headwind that.
So we will have some of that in second half.
And.
The important part for us is that they are printing.
With the.
More than half a million.
Our everyday which will help us also in a little materials growth.
Okay Fair enough and then just going through the Q. It looked like you received a notice related to the export compliance item that you've been dealing with but required immediate suspension of contracts with the air Force.
How much revenue is going to impact I mean, how big of a customer are they.
Well I think you know the government is in a very important customer. We just we just learned that on July 19th Sylvia steel.
Figuring out the overall impact and what we want to do is.
We want to make sure that we support the enlisted location.
And.
But at the same time the suspension does allow us to continue to perform current federal contracts and the products, which are not very custom we can still ship. So you don't we absolutely believe this is something that we need to address and we are working on it.
But can you comment on how big of a customer they've been maybe in the past just as a reference point.
Right now, we just don't know how much the impact it will have because you know its not going to be all of it and so I think we are going to evaluate.
And.
We will just be will really.
We need to.
Evaluate overall the impact and one thing I can say they are not a significant.
Customer in terms of the revenue.
Okay, great. Thank you.
Our next year comes the line of Brian Drab from William Blair. Please proceed with your question.
Hi, Thanks for taking my questions.
First I just wanted to clarify you mentioned.
Thanks.
The first part of Q and a.
Sequential revenue trajectory is expected for the second half and looking at the model.
Over the last four years, it's averaged down about 6%.
From second quarter to third quarter in terms of revenue is that that you think are you thinking about it right Brian .
You are thinking about it right.
Okay and then.
Are you thinking, though that given some of the headwinds you're seeing in Europe and that.
Can you comment anything that you've seen in July that gives you confidence that it would only be.
Downtime that typical.
Seasonal amount.
I believe we just don't have enough information on what we might do you feel that.
That single digit down once you had mentioned is reasonable for modeling purposes.
Okay.
And then I listen to that last question about the gross margin in the mix and I still feel like I'm not.
Not.
Hearing.
Anything.
Very tangible in terms of the mix.
So I think there isn't really to and so what is happening and why the gross margin go to 45% for the balance of the year.
Yes, so I think the two things that we need to be looking at one we want to continue to drive our inventory down so the factory utilization point of view.
We need to make sure that.
We appropriately model that in the second thing is the mix of.
Materials and software.
Similar hardware is going to be the second one I think that it's important for us.
Two.
You know really dig the inventory very seriously because we feel that our cash.
Preservation is going to be very important for us I think thats why we are putting that balancing approach Edwards if thats consistent we had we definitely saw we saw a bit of a bump in Q2, there and that was that was great but mid fortys is not inconsistent with certainly what weve done prior to Q2, and what we've been saying for the balance of the year.
The.
So we think Thats a.
We think thats directionally, a good way to think about it.
Got it thank you.
Our next question comes the line of David.
Regime from Susquehanna Financial group.
Please proceed with your question.
Hey, Thanks, so much for taking the question hi, guys.
Just wanted to get an update on the powder management system. The technical issue. There and you noted that you you made a decision not to ship the factory solutions during the quarter. So that suggest that you had orders, but you you consciously decided not to ship is that because you're just not comfortable yet.
Shipping the partnerships, So Paulo, yes, yes sort of.
What we.
Basically committed to really make sure that every product we ship is going to meet our quality and reliability requirements. That's very important for the company.
We understand the root cause of the technical issue, we have started putting together the solution and the design.
And.
We believe that we will have limited shipments in later of 2019, and we will scale.
This particular solution in 2020.
Okay got it and.
And as far as European.
Automotive softness that's certainly a key market I believe for for your.
DMP product line, what impact is it having specifically on.
On on the entirety of your of your battles portfolio.
Well I I think automotive market is very important for.
Two places the first place will be our prototyping business, because we still have a big.
Prototyping business there.
No more data is.
Really using for getting the rapid prototyping.
And the second place that we have also.
Is the lira on demand parts business in Europe , which is also impacted from the automotive so both printer hardware.
And the you on demand printing business studies.
Great and then if I can just squeeze one last one in.
The material strategy can you remind me does that include.
Anything around metals powder or is that entirely around your figure for mainly I would say, it's mainly 95% would be no.
Plastics materials because.
Our approach has been that we want to really invest in.
Materials, R&D, where we can create proprietary materials with which will have a very unique value proposition and that's why we are very excited about the production the deal that will be introducing later this year for us for metals.
It's a commodity and we don't really invest into that.
Okay. Thanks, so much.
We think the reminder, if you would like to ask a question. Please press star one on your telephone keypad.
Our next question comes from the line of an Anda Borough from loop capital markets. Please proceed with your question.
Hey, guys. Appreciate the follow up Hey, just wanted a quick clarification on the on the Opex will mark.
You guys, you're talking clearly about flattish opex dollars.
This point forward, but VJ you also mentioned that you are going to take out.
Additional 10 to 15 million through the year.
So can you just sort of flip those two comments for us. Thanks.
Yeah sure. So they tend to first of all the 10 to 15 million dollar comment, which showed that which we made last quarter. Two was based on the whole year across both cost of sales and operating expense versus our own original plans number. So we're on track with that.
The actions that will continue that have already started that will continue in the second half.
Will allow us to be flattish.
Per our comments so it's not on top of that certainly if we see other opportunities we're going to take them, but I think right now that's that's the best direction would give you. So if you look at what we spend in Opex in 2018.
We're going to reduce that substantially in 2019 and the other very important thing that we are doing is in our cost of sales reduction and work that Phil and the supply chain team is doing so thats. The combination in terms of what we believe that we need to really continue to drive.
Our cost reduction the other important thing that I want everybody to here is we are also focused on cash because we absolutely believe.
That in this model market uncertainties, we want to make sure that we are focus on customers.
Thanks, so much appreciate it.
Take care.
Our next question comes line of Jim Ricchiuti from Needham and company. Please proceed with your question.
If someone here Kevin Thank you.
Your commentary about figure four I wonder if you can go into a little bit more detail can you talk about where you are getting the traction which versions production the modular.
Sure. So first of all we are getting incredible traction with our dental printer, because we have a very unique value proposition and.
We are seeing that we gained significant market share with a word around next 10 5100 dental printer.
And.
I do believe that we will continue to really.
Gain share and grow that category. The other good thing about that it will also generated the materials revenue growth in our dental materials. So thats the place.
We are doing really well.
With respect to.
Modular we just introduced modular so.
We are still in the scaling that particular category the standalone figure for.
You know isn't really waiting for these production materials that I talked about because in my view. The platform is very sound. It is very reliable it prints very fast.
But just like in the dental application unless you have the materials the software and the hardware you are not going to get the traction. So I absolutely believe with this new production materials, we're going to get traction in both standalone and modular starting in fall, but really in 2020, it will become as successful as our dental Brent.
BJ within your medical business.
That grew 11%, excluding the large enterprise customer it sounds like the biggest driver has been dental.
No. There are three drivers one is the simulators, our simulators are doing really well on the value proposition that here, especially in countries, where you need to use simulator.
For.
Training purposes for nurses and doctors as like France, China.
Data become a mandatory so you know it's really helping.
Simulator business. The second thing is of course dental and the third thing is their advanced manufacturing.
When you think about.
Companies the medical devices company.
They want to get into printing.
Medical devices, because that's a very big opportunity and our advanced manufacturing team is getting lots and lots of growth because of medical device companies that have seen no really the opportunity to learn about how to do threed printer medical devices, and we hold their hand in growing and scaling that business. So I think those are the three places I absolutely believe led the growth we have seen in the first two quarters of 2019 and that growth will continue for the remaining of 2019 and 20.
Thank you.
Thank you.
Thank you there are no other questions at this time I would like to turn the call back over to Stacey Witten for closing remarks.
Thank you for joining us today and for your continued support 30 systems. A replay of this webcast will be made available after the call on the Investor Relations section of our website. Thank you.
At the end of the conference. Thank you for your participation.