Q4 2019 Earnings Call
Ladies and gentlemen, thank you for standing by our conference will begin momentarily once again, ladies and gentlemen, thank you for standing by our conference will begin momentarily.
Greetings and welcome to the NAPCO Security technologies, Inc. fiscal fourth quarter, 2019, and full year results conference call.
At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Mr., Patrick Mckillop director of Investor Relations. Thank you you may begin.
Thank you good morning, and thank you all for joining us.
For todays conference call to discuss our financial results for our fiscal fourth quarter 2019 in fiscal year 2019.
By now all of you should have had the opportunity to review the press release discussing the results.
If you have not a copy of the release is available on the Investor Relations section of our website Www Dot NAPCO security Dot com.
On the call today is Richard Soloway, President and CEO of NAPCO Security technologies, and Kevin Michelle Senior Vice President and CFO before we begin let me take a moment to read the forward looking statement.
This conference call may contain forward looking statements that involve numerous risks and uncertainties actual results performance or achievements may differ materially from those anticipated in such forward looking statements as a result of certain factors, including those set forth in the Companys filings with the FCC. During the call. We may also present certain non-GAAP financial measures such as adjusted EBITDA and certain ratios that are used with these measures in the press release and on the financial tables issued earlier today, you'll find a definition of these non-GAAP financial measures.
I reckon, Chile reconciliation of these non-GAAP financial measures with the closest GAAP financial measure.
As well as a discussion about why we think these non-GAAP financial measures are relevant to our results.
These financial measures are included for the benefit of investors and should not be considered instead of GAAP measures.
I will turn the call over to <expletive> in a moment, but before I do I just want to mention a few things on the IR front.
In terms of upcoming Investor outreach outreach, we will be attending and hosting one on one meetings at the Lake Street.
They can re conference on September 12 in New York.
And also what the C.L. King Conference in New York on September 19th.
Investor outreach is crucial especially for small cap companies after NAPCO and I would like to thank all those folks that assist us in these conferences and marketing trips.
With that out of the way, let me turn the call over to Richard Soloway, President and CEO of NAPCO Security technologies.
<expletive> the floor is yours.
Thank you Patrick good morning, everyone and welcome to our conference call.
Thank you for joining us today to discuss our results.
The fourth quarter and fiscal year 2018 marked another record revenue and profitability performance for NAPCO.
Our SAS recurring revenues continue to grow at a rapid rate.
Recurring revenues annual run rate is now 20.4 million as of June .
Our focus on targeting the professional installation and mostly commercial end markets is driving this continuous growth.
Our balance sheet remained strong with zero debt as of this report and our cash balances continue to grow.
Capitalizing on key industry trends, including school security solutions.
Wireless buyer and intrusion alarm communicators enterprise access control systems and architectural locking products remains our focus.
The management team here at NAPCO continues to focus on the key metrics of growth.
Profits.
And return on equity.
These metrics are important for us as well as our shareholders.
Our business strategies executing well at our interests are aligned with our shareholders as senior management at NAPCO owns 38%.
Oh the equity.
Before I go into greater detail I'll now turn the call over to our CFO Kevin be show.
He will provide an overview of our fiscal fourth quarter and fiscal year financial results and then I'll be back with more on our strategies and outlook.
Kevin.
Thank you <expletive> and good morning, everybody.
For the fourth quarter net sales increased 9% to $29.6 million, which was a record quarterly performance.
And the twentyth consecutive quarter of year over year record sales.
As compared to $27.3 million for the same period a year ago.
For fiscal 2019, net sales increased 12% to a record $102.9 million.
As compared with $91.7 million a year ago.
The increase in sales for the quarter were primarily related to increased sales of our alarm communication services.
Well locking products and access control products.
For the full fiscal year. The increase in sales was primarily related to increased sales from alarm communication services and products.
Door locking products and access control products recurring monthly revenue from the alarm division increased 44%.
For the quarter at 45% for the fiscal year.
Recurring revenue now has an annual run rate of $20.4 million based on June 2019 recurring revenue.
Gross profit for the fourth quarter increased 7% to $12.9 million with a gross margin of 44%.
As compared to $12.1 million with a gross margin of 45% last year.
Gross profit for fiscal year, 2019 increased 16% to $43.9 million.
With a gross margin of 43% as compared to $38 million with a gross margin of 41% last year.
The increase in gross profit for the fourth quarter end the fiscal year was primarily due to the increase in sales as partially offset by increased salary and freight expenses.
The slight decrease in gross margin in the fourth quarter was primarily due to product mix as well as additional sales discounts given related to several new product launches.
The increase in gross margin for the fiscal year was primarily due to the 45% increase in recurring revenue.
Well the gross margin was 78%.
As well as the leverage from the Dominican Republic manufacturing facility.
Generated from equipment revenue increases of 7%.
Also please note that the tariff situation with China has no effect on our margins as we manufacture virtually 100% and the Dominican Republic.
Even when we get raw materials from China. They are shipped directly to the D.R.
So no tariffs.
Our competition is not as fortunate.
They have tariff issues on both finished and raw materials.
R&D expenses for the fourth quarter increased 8% to $1.9 million or 6% of sales.
Compared to $1.7 million or 6% of sales last year.
For the fiscal year, R&D expenses increased 9% to $7.2 million or 7% of sales.
As compared to $6.6 million or 7% of sales last year.
The increase for the three months ended the full year was primarily due to additional personnel.
S. DNA expenses for Q4 increased 3% year over year to $6.3 million or 21% itself.
As compared to $6.1 million or 23% of sales last year.
For the fiscal 2019, as you get a expenses increased 1% to $23.2 million or 23% of sales as compared to $23 million or 25% of sales last year.
The increases in dollars was primarily from increases in employee compensation. The decrease as a percentage of sales was primarily the result of the percentage increase in the sales exceeding the increase in selling general and administrative expenses.
Operating income for the fourth quarter increased 11% to $4.8 million as compared to $4.3 million last year.
For the fiscal year operating income increased 60% to $13.5 million compared to $8.4 million last last year.
Income tax expense for the quarter decreased by $531000 to $35000 as compared to $566000 last year.
Income tax expense for fiscal 2019 increased $538000 to $1.2 million as compared to $684000 for the same period a year ago.
The decrease in income tax expense for the fourth quarter was primarily due to the recognition of increased R&D tax credits.
The increase in income tax expense for the fiscal year was primarily due to the aforementioned increase in operating income.
The company's effective tax rate remained relatively constant at 9% for fiscal 2019 as compared to 8% for fiscal 2018.
Net income for the fourth quarter increased 28% to a fourth quarter record of $4.7 million, which equates to 16% of net sales or 26 cents per diluted share as compared to $3.7 million or 20 cents per diluted share last year.
For the year net income increased 60% to a record $12.2 million, which equates to 12% of net sales or 66 cents per diluted share as compared to 7.6 million or 41 cents per diluted share for the same period a year ago.
The change in net income for the quarter ended the year ended June 32019 was primarily due to the items previously mentioned.
Adjusted EBITDA for the quarter as outlined in the schedule included in todays press release increased 10% to $5.2 million, which equates to 17% of net sales or 28 cents per diluted share.
Compared to $4.7 million or 25 cents per diluted share last year.
For the year, adjusted EBITDA increased 51% to $15 million, which equates to 15% of net sales or 81 cents per diluted share as compared to $10 million or 53 cents per diluted share last year.
Moving onto the balance sheet.
The cash balance at June 32019 was $8 million as compared to $5.3 million at June 32018, our working capital as of June 32019, with $51.1 million as compared to $44.3 million at June 32018.
Current ratio was 4.6 to one at June 32019, as compared with 5.7 to one at June 32018.
And debt remained at zero at June 32019.
Net cash provided by operating activities for the quarter was $2.99 million.
And for the full fiscal year with $8.7 million.
Inventory levels remain higher than normal as we are gearing up for several new product launches, including ice secure our new marks anti liggett Sherlock and our new line of 80 and C. L. T E Starlink radios, all of which <expletive> will cover momentarily.
Capex was $388000 during the quarter and was 1.9 $1.988 million for the year.
That concludes my formal remarks, and I would now like to return the call back to <expletive> .
Kevin Thank you.
The growth of our business is strong and we believe the trend will continue in the future.
Demand for our recurring revenue products is coming from a lot of communications, including fire intrusion and the growth of the smart home category.
We continue to believe that the market opportunity for school security in the United States is significant.
There are approximately 100000 K through 12.
And 10000 colleges and universities in the U.S.
None of us will ever forget the tragic events that took place during 2018 and continue to take place this year.
We remain dedicated to providing solutions and products that schools, so desperately need.
During past conference calls, we have discussed an increased volume of legislation being asked by many states since 2018, which includes funding of $1 billion.
According to the U.S. News and World Report article earlier. This year states are considering nearly 250 different schools safety bills in 2019.
This underscores how the issue remains front and center for everyone.
The federal government you may recall in 2018 passed a grant program, which is allocated $100 million per year through 2028 for school security.
We are also aware of other pending legislation.
Which we are monitoring.
The pipeline for school security products looks robust.
And we will continue to announce new wins, when we can as we need to receive approval from the schools prior to doing so.
Recently, we have witnessed more a more active shooter incidences.
Taking place is at houses of worship and other public meeting places we've seen the need to expand the use of a savvy ordered system for these locations.
The continuing violence in public area is painting, a clear picture for the need to secure these areas with products such as wireless locks and access control.
During Q4, we began the launch of our new 80 and C. L. T E. Starlink line of Universal fire intrusion alarm and I O T communicators.
We now have starlink lines on both the horizon and the 80 and T. L. T E networks, which provides our dealers with the largest LPG service coverage in the U.S.
Also we will be launching the new version of our marks division and I look at your locks.
These locks meet a D.A., that's Americans with disability act requirements as well as the B H M. A highest at the linkages standards.
Shaping construction of these locks sensor designed to restrict the attachment of lines leases et cetera, the dogs and leavers.
The lock sensor offered an unprecedented unprecedented cylindrical mordor styles models and functions and provide easy installation and retrofit the all popular door constructions.
We are very excited about the upcoming launch of our latest product ice secure.
It was the viewed at the eye as sea West trade show in Las Vegas in April of this year.
The ice secure is designed for the new breed of professional installers and savvy consumers.
It has quick installation time and its advanced features are perfect for smart home applications. So in demand today.
The ice secure one the MVP that's the most valuable product award in the home controls category at the trade show and drew lots of traffic from dealers into our trade show Booth.
Lastly, our fire link fire alarm control panel with a built in cellular communicators launched earlier this year.
Fire link and all of the one eight grew 30 twos on fire alarm panel with built in cellular LTV Starlink powered communicator has grown quickly in sales fire link comes Preconfigured and pre activated enabling easy installation at cost savings the dealer.
Via link will add to our already rapidly growing recurring revenue.
We will begin our Q and a session portion of this call in a moment.
Our fiscal year 2019, it was a very successful record breaking year for us as we continue to grow the company and deliver strong profits.
Our shareholders have been rewarded with very healthy returns and stock performance NAPCO is in a strong position to continue its growth in sales and profits going forward.
We're excited about the future fiscal year 2020 and beyond.
[noise] NAPCO senior management maintains a high level of ownership in our equity approximately 38% and I would like to thank everyone for their support and for joining us in this exciting future we have.
Our formal remarks are now concluded we'd like to open the call with the Q and a session.
Operator. Please proceed.
Thank you well now 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'd like some of your question from the queue for participants using speaker equipment, maybe necessary to pick up your handset before pressing the star keys, one moment. Please only poll for your questions.
Our first question comes from the line of Jason Schmidt with Lake Street Capital. Please proceed with your question.
Hey, guys. Thanks for taking my questions just wanted to start with the security market Our school security market. It seems like you're seeing some really nice traction. There can you comment if you're seeing the size of the installed increasing over the past few months here.
There is oh good morning, there are many different types of jobs that we're getting and.
Some of them are larger than others, and we always find that with the jobs that we do the schools, especially universities keep adding to them. So we've done some schools Weve gone back four times keep doing the dorm buildings in the classrooms in the executive offices, but they're all different sizes all over the country. If you've seen the press release, we put out there all starting to come together where.
Localities want to protect the students.
Come to the realization this is not going to stop that unless something major is done in policy within the country, which that looks like that's kind of stymied I don't know whats going to happen with that so the only way around all this is to put in school security and all line of school security is the widest school security line in the industry and that we make standalone, we make remote control, we make systems, where you can have a man trap and lock in active shooter between doorways. There are different ways of configuring our systems that we're very flexible. So we expect it to get there you small medium and large jobs at each job increasing in volume as they add more facilities through.
Okay. That's helpful and along those lines just given the increasing traction in that market do you expect to need to add to head count in a significant way to address all the opportunities.
We have a very nice network of sales agents and reps and in fact, we've made it a and integration between the marks group and the alarm lock room. So that we have more salespeople and they're more intense in their territories, but we don't expect to see an increase or.
And for the for the new year in fact this year, yes, Gionee was basically flat we were very budget conscious we wanted to make sure we get the most efficiency out of each other salespeople as far as the manufacturing side of the business. You know we are in the Dominican Republic. Our components is shipped in from all over Asia, and we do all our assembly there the minimum wage and the Dominican Republic is $2500 a year. So it's not really material. If you get another 50 workers assembling products. The margins are great on the products. So that it's not really a material effect. So a pretty stable in both of these areas both sales marketing and manufacturing.
Okay and the last one from me and I'll jump back into queue. I know previously you threw out a $40 million recurring revenue run rate target for fiscal 21, do you still feel confident and that target.
Not only do I feel confident as Kevin not only do I feel confident Jason.
I thought you know we've been pushing hard to get to 20, we got to 20.4 million dollar run rate.
40 million, we could beat it.
And I'm, just keep the I'm still saying 40.
But if we add recurring revenue into the other areas of the business like we've talked about.
Try to get it into the locking side in the access.
We'll blow past the 40 million for now, let's just call it 40 million.
By June of 21.
Okay. Thanks, a lot guys you're welcome Jason Thank you.
Thank you. Our next question comes from the line of Mike Walkley with Canaccord Genuity. Please proceed with your question.
[noise] great. Thanks, great to see the recurring revenue growth and a reiteration of targets.
Just a question for me on the hardware gross margin side would've thought would've been a little bit closer to 40% went to 24 million in hardware revenue achieved this quarter can you talk a little bit about the mix that impacted margins for the quarter and maybe a little more color on some of the price discounts that you gave during the quarter.
We we tried to do like is to.
Capture a lot of the 80 and see radio market LTV.
And we introduced that in the fourth quarter.
And our thought process was.
Lets capture that market because once we start getting the recurring revenue.
We got that pretty much for life.
It's a big market, we didnt have it we're starting to get it.
I would put about 2%.
Margin effect in the quarter because of that.
So I would have expected normal normal situation.
To be at 40% also.
We came in at basically set a 37% so it was a 3% differential.
2% I would say is because of discounts we gave on the new product introduction.
1% I would say is due to the mix we aired sometimes theres mix difference if we get a big school job at a university in one quarter and you get a job that's not as bay. The following year that could that could easily affected by 1%.
Nothing nothing that we saw our out of the ordinary to have a 1% differential on mix.
Not that unusual the part that was different was the 2%.
Because at discounts.
Virtually all due to the 80 and team.
LT radio in true.
Great. Thanks, and then maybe just just building on that you highlighted all kinds of new products ramping in the coming quarters, how should we think maybe about mix from the new products, how does that impact gross margin in the short term on the hardware side, obviously growing the recurring revenue the upgrade to the long term, but how should maybe think about short term margins given given some of these new products coming into the model.
I think in Q1, you will see a little more.
A little more of what we saw in Q4 and the introduction because the LT, that's a big big area for us you'll see a little more of that.
I don't think you'll see any discounting or we introduce the new anti leg, that's a very expensive high margin product to begin with.
And everybody wants to get their hands on the new version, we don't have to do that were like a one of the few that manufacturers. This.
The ice secure that's coming out of the gate very aggressively priced we don't have to discount that beyond what it is people are going to jump at that just because the price is so good right out of the gate.
Got a blow away the competition, so I don't expect any discounting on that one either.
It's really a little bit more on the radio side, but we believe that with the recurring growing dramatically like it has with 78% to 80% gross margins.
That it will more than it will more than make up for that.
Great. Thanks, and last question for me and I'll pass it on just on the recurring revenue given given your confidence should still think of like a 40% plus year over year growth rate or does it slow in the short term then accelerate as the new products start to ramp and then secondly, just just given the ramp at 18 t. any any color how it's going so far maybe relative to the Verizon launch. Thank you.
We expect that the $40 million is a number that we're going to hit in the June 30, a 21 year, we think that with the 18 tea the ice secure and some of the locking products, which are going to be generating recurring revenue, which is revolutionary for the business never been done before that the whole industry.
Blocks traditionally don't generate recurring revenue there are one off sale, but our versions in locks will generate recurring revenue for the installation companies as well as the end users.
We think that we can go beyond the $40 million and we'll do we'll have to do to get our market share, but I think that the price points that weve set established are going to be pretty stable and as.
And we're going to hit that number of 40 and beyond that's how we look at it.
Great. Thank you.
Yeah, Mike.
Thank you. Our next question comes from the line of Matt Pfau with William Blair. Please proceed with your question.
Hey, guys. Thanks for taking my questions.
I wanted to ask on hardware growth and the quarter.
It's the lowest for the year.
And.
But the full year was about 7%, which is sort of in line with what you guys have talked about the longer term was there anything disappointing in the quarter or one off in the quarter that had that growth rate below the other quarters and the year and how do we think about that growth rate going forward is the fourth quarter more indicative of the go forward or is the full year growth more of how we should think about it.
The hardware growth.
For the full year of 7%.
Was one of the one of the highest increases we've had in years.
We've been saying.
Our goal is to get to high single.
Or double digits, so 7%, we're on our way to high singles.
I don't think there's any reason for us to believe why we can't do more.
Better from a percentage point of view in fiscal 20 since we're introducing so many things.
You know between the ice secure in the new Hanting leg, and the new radios and the fire link paddle hasn't been out that wrong.
You know were don't spend a lot of a lot of money on R&D.
For us a lot hasn't gone up by that much but.
$7.2 million this past year.
They're spending a lot of time on doing a lot of things that get us more recurring.
And more hardware the hardware sales very important to us too.
The Dominican leverage we've talked about very important.
You know just we didnt see it as much in Q4, but you start for the full year.
And that's a big part.
Of what we're doing.
We're getting so busy down there we're going to be go into a second shift on radio so.
These are all good things.
So if I was projecting out I would still believe that low single digit high single digits for Q.
For the full year, even though it was lower in Q4 is still still the goal and still very achievable.
Got it and then on the school security side, you mentioned all these funding bills that are out there and a few that have passed how big of an impact has the government funding.
And to the school security business or is that still more of a an opportunity with some of these bills being passed potentially accelerating the growth of that business.
Well, we're seeing or an increase in school security jobs, the publishing them as we get them. There's many many more in the queue. It's the schools are being they're getting some funding from their regional area. We expect is going to be federal funding is going to be legislation put out so all of this.
Primes, the pump to get a lot more business and since we have offerings for K through 12, which are low cost easy to convert K through 12 to more secure places for the students.
And not that expensive to do schools are jumping the gun and doing their own financing of this through state legislature counties around the country. The colleges universities have large endowments there a using that money in anticipation of more money coming down and we're seeing a better situation in the schools that make these moves and they're going to be much more protected for the students. So we see this all of the very positive light and it's going to take many many years of growth and the schools will be secure but as far as we can see I can see five years of continuous school growth.
Head of us and and the big money is starting to really come down.
Got it and.
In terms of the the Hurricane that's currently.
Impact in the Caribbean any any impact there to your operations and that and again I realize it didnt hit there, but in terms of getting the gets out of that and then again to the to the U.S. is there any disruption there from from the Hurricane.
We haven't we our factories category five and the Dominican Republic, So the hurricane itself Didnt hit.
There's going to be we ship things both by air and by Sea.
So.
We haven't gotten feedback yet from the ocean shipping companies, but they are there. They are on top of their game. So we expect with the amount of inventory. We have here that we'll be able to satisfy all demands and keep things rolling but let's see how oh.
Things are go in the next week or so.
Okay got it that's it for me guys. Thanks, a lot.
Thanks, Matt.
Thank you once again as a reminder, if he would like to ask a question. Please press star one on your telephone keypad for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
Our next question comes from the line of Jeffrey Kessler with Imperial Capital. Please proceed with your question.
Thank you. Thank you for taking my question.
I.
It's probably fair to say that there was a little bit of a surprise.
On our on the analyst part in looking at how much you spent on on some of the new investments that you're making a lot of the H.C. and G. radio a capture capturing that part of that market.
And I'm wondering.
Just this brings up two questions number one do you think that number one by keeping this under wraps at least publicly not talking about what you are going to invest in do you think you've been able to take a look up the competitive market a little bit by surprise since you've already been in the in the.
In the horizon side of the market you had in the A.H.T. markets. So so heavily do you think that you again, taking a little bit of the ATM GE folks.
Communication side by surprise and number two.
Of these investments that you're making now where do you see the returns coming let's get if you want to call it a little bit earlier, and which ones are going to be taking a little bit longer to play out over the course of the next fiscal year and a half.
Jeff you know these are complicated questions.
Well you know, it's not an exact science, but it's always good to sneak up on the competition and that's why the 18th he radios are very important launch and you hit the nail right on the head we're going to have tremendous success with the ATM fee radios to grow or recurring revenue and we had to do we had to do.
The run the business and a very solid way for four.
Mid term and long term and that ATM T. radio nationwide.
Makes us very unique in the fact that we're doing fire with it as well as.
Home and a small business. So it's a it's an important thing to do and it bodes well for our future. We expect that between 80 and T. radios and ER I secure every I secure has a radio built into it. So that every alarm that's installed going forward of ice and go which we expect to be a real volume producer will generate recurring revenue for us and having it on all these networks is very important. So that's what it is if you want more detail we could do a compensation later on.
Uh huh.
Getting deeper if you want to go deeper than this.
Sure.
And as far as and as far as if you want to call. It I don't want to say a schedule but.
What do you see as which are we going to be seeing the returns from.
A little bit earlier, which are really seeing the returns from a little later and those investments that you were making up over the last quarter and into it obviously into the next quarter.
Well our investments are we have this goal we have a goal in June 30, or 21 that were going to be at $40 million and recurring.
And it was going to be $100 million in hardware manufacturing.
And you put that together and you are over a $1.30 a share.
And that is our goal and we're doing everything we can to.
To win market share to get to a goal and go beyond our goal and it looks like Oh.
This is working for us.
Okay, and one final question or one of the real big issues that I'm dealing with right now and which the industry is overall is dealing with right now to try to product not just pop up but too but you are just to reinforce the value proposition is the difference between verified and unverified alarm signals out there.
The difference between convenience and having a professional service have police show up within five or six minutes on the residential side not just on the on the commercial side. What are you folks what are you doing and I'm thinking about I'm thinking about I secure and companies and products like that what are you doing to.
To accelerate the industries.
The professional industry's ability to have police and the if you want to call. It the peace apps, the 911 centers, except the signals more more readily.
And allow police to come in and and respond without having false alarms.
So a lot of the fools the law firms are caused by a DIY products not professionally installed products via why products are not oh, not attached to the walls of the ceiling that well they move and they cause a false alarm.
Or they're not close enough to the magnetic contacts ago.
On the Windows, so that caused a lot of false alarms.
Our ice secure is not aimed for the D. I y market, but its price points as functionality is puts a dealer professional dealer or in in the game of installing more and more alarm systems, which compete.
Against the DIY products, so its very professionally installed which eliminates a lot of the full so long as you're getting from D. I Y and we're trying to arm our dealers and then and the dealers across the nation with a product which has a better return on investment.
More reliable.
More feature rich ER and the installs with less false alarms, that's our contribution to the what's going on it reports to all central stations airports, so usually and it works through our back end and those C, which has ability to.
Give us additional functionality to eliminate false alarms and we can talk about that off line because I know that.
Got you and the industry at US we're all proponents of keeping the police a response to real along as outflows along as it is a major thing in the industry, but we can talk offline and go through exactly what this does from a decoupled rate Richard Yes, that's great. Okay. Thank you very much I appreciate it.
Alright.
Thank you we have reached the end of our question and answer session I would like to turn the call back over to Mr. solidly for any closing remarks.
Thank you everyone for participating in today's conference call.
As always should you have any further questions. Please feel free to call Patrick Kevin or myself, a further information. Thank you for your interest and support and we look forward to speaking to you all again in a few months.
Thus napcos fiscal Q1 20 results.
Bye bye.
Thank you. This concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.
[noise].