Good day, ladies and gentlemen, and welcome to the Intermolecular First Quarter 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions)
I would now like to turn the call over to Gary Hsueh, Senior Director of Corporate Development and Investor Relations. Please go ahead, sir.
Thank you, Jamie. Good afternoon and welcome to Intermolecular's first quarter 2013 earnings conference call. We announced results after the close today and you’ll find a copy of the press release on our website at www.intermolecular.com. On the call with us today are, Dave Lazovsky, President and Chief Executive Officer and Peter Eidelman, Chief Financial Officer.
Today's conference call contains forward-looking statements. Any statement that refers to expectations, projections or other characterizations of future events including any statements that relate to our expectation that Micron or consummated acquisition of Elpida, as well as any statement regarding financial projections and future market conditions is a forward-looking statement.
Actual results may differ materially from those expressed in these forward-looking statements. Intermolecular assumes no obligation to update these forward-looking statements, which speak only as of today. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as the risks described in our Form 10-K for fiscal 2012 as filed with the SEC, particularly in section title Risk Factors.
Before we begin, please note that during this call we will discuss non-GAAP financial measures as defined by the SEC, Regulation G. We believe non-GAAP financial measures provide useful supplemental information to both, management and investors, but note that these measurements are not a substitute for GAAP and should only be used to evaluate the company’s results of operations in conjunction with corresponding GAAP measures. All non-GAAP measures are reconciled to the most directly comparable GAAP financial measures in our press release issued today.
With that, I'll now turn the call over to Dave.
Thanks, Gary. Good afternoon, everyone, and thank you for joining us on today’s call and webcast. Q1 was an eventful quarter for Intermolecular which successfully led to an agreement with Micron for a multi-year collaborative development program and IP licensing agreement spanning DRAM and its non-volatile memory.
We also signed an agreement with Elpida that extends the development period under the Elpida CDP. We announced the signing of these contracts with Micron and Elpida last week. These deals will transition our CDP and IP licensing agreement with Elpida to Micron upon the closing of Micron’s acquisition of Elpida and will also meaningfully expand the scope and scale of our engagement to include Micron’s non-volatile memory products. As a result of having these agreements in place before the acquisition closes, we do not expect any disruption to our ongoing R&D activity on low power mobile DRAM. I’ll discuss this collaboration in more detail in a moment.
Another recent milestone for us was the CDP and IP incensing agreement that we signed with Epistar. This represents our formal entry into the LED market. Our ability to enter the LED market with a Tier-1 industry leading player is a testament to the broad applicability of our HPC platform to drive R&D innovation across solid state thin-film technologies. We executed our diversification strategy last year in establishing CDP and IP licensing agreement with First Solar. So far this year, we've added Epistar in LED and we've aligned internal R&D and resources to support continued diversification to the display market this year.
In terms of financials, we reported revenue of $17.4 million and non-GAAP breakeven or $0.00 per share, in line with our execution plan and guidance. Beneath these headline financials, is the fact that with Micron's entry into a multi-year CDP and licensing agreement for DRAM and on-volatile memory and with the extension of our strategic engagement with Toshiba and SanDisk, we've expanded our market penetration in memory and built our current total backlog to meaningfully exceed 2011 year-end levels.
Before discussing more specifics, I’d like to provide more perspective on the company’s current position and how we are aligning management for the company’s growth for the years ahead. The highest priority within the company has always been to focus on delivering return on investment on our existing CDPs and to help ensure that developed technology and IP moves into production.
As many of our CDPs and semiconductors mature and approach IP commercialization, we are raising the bar for ROI. To aggressively address this rising bar, I’m pleased to welcome Dr. Raj Jammy to Intermolecular’s Executive Management Team, as Senior Vice President and General Manger of the Semiconductor Group.
Raj has had an accomplished carrier in semiconductors at IBM, and more recently at Symantec as VP of Materials and Emerging Technologies. He is a highly regarded industry veteran and expert, and I look forward to his leadership in semiconductors to contribute meaningfully to growth in the years ahead.
Coming back to Micron, as one of the key foundations for growth, the CDP and IP licensing agreement with Micron represents a milestone for the company and establishes the framework for monetization of our existing developed IP and DRAM and maps our green field IP licensing opportunities in non-volatile memory.
As I’m sure you are aware, Micron is a visionary leader in semiconductor industry and mainly possess the breadth for products, system level expertise and manufacturing size and scale that represents a right field of opportunities for developed technology and IP creation leveraging our HPC platform for R&D.
In DRAM, we doubled our IP licensing reach with the addition of Micron from just 13% of the total end market based on Elpida alone to approximately 25%, anticipating the combined DRAM capacity for both companies. In non-volatile memory, Micron adds 17% to our IP licensing reach in the NAND flash market. Combined with our existing IP agreement with Toshiba and SanDisk, this brings our total IP licensing reach to close to 60% of the total NAND flash end market.
In addition, Micron’s [node] business, which comprised 26% of the market in 2012, potentially represents incremental technology development and IP licensing opportunities for Intermolecular in the future. Micron’s embedded and systems level solutions, for example multi-chip packages for mobile, automotive and SAP drives for computing are focus on markets that demand better, faster, cheaper products. That is higher read/write performance, lower power draw and lower cost per bit.
In almost all instances better, faster, cheaper products demand new material sets, process integration schemes and new device architectures and this is ultimately why we believe there is a strong synergist effect between Micron and Intermolecular.
Starting in Q2, our CDP revenue stream from Micron will reflect the addition of technical personnel and HPC platform resources aimed at technology development for DRAM and non-volatile memory. In terms of IP licensing, near-term Elpida has confirmed commercial shipment of 25 nanometer DRAM products in Q1 of 2013. As a result, Elpida has begun paying Intermolecular the step-up and fixed quarterly licensing fees.
We have maintained this fixed quarterly licensing fee structure or referring success fee structure of Micron based on the commercial implementation of predefined IP blocks that are stackable at more advanced technology nodes starting with 20-nanometer DRAM. While this commercial structure differs from the former volume based royalty arrangement with Elpida, over the longer term, we potentially stand a benefit from a much larger and more predictable stream of quarterly licensing revenue from Micron for DRAM and non-volatile memory combined without exposure to unit and ASP volatility.
Also in Q1, we disclosed in an 8-K the extension of our strategic collaboration with Toshiba and SanDisk. They have extended our longstanding CDP and IP licensing agreement through Q1 of 2014, and we believe this provides a further signal of the strategic importance of 3D ReRAM for both, Toshiba and SanDisk. The extension become effective in Q1 and maintains our current CDP revenue and IP licensing strengths.
As evidenced a recent technical progress, Toshiba and SanDisk jointly published a paper in late February of this year at the International Solid-State Circuits Conference that disclosed incremental details on their 3D ReRAM design and chip performance. From our viewpoint, there were a couple of key observations. First, an unveiling the 24 nanometer, 32-gigabit by layer ReRAM device, Toshiba and SanDisk have achieved the highest memory density levels to-date in a working device using an emerging non-volatile memory technology.
Secondly as a bilayer device, this result demonstrates the scalability of ReRAM in the third dimension to reach much higher levels of memory density in the future by the injection of more layers. Our collaboration with Toshiba and SanDisk is just at tip of the iceberg. In terms of the R&D investment and capital commitment, both of these customers are making to commercialize 3D ReRAM. We are excited about the opportunity to support each company as a product qualification, prototyping and sampling activities for three dimensional resistant RAM technology.
Now shifting to advanced logic. We're currently in discussions with GLOBALFOUNDRIES to focus our collaboration on their highest priority projects. We expect to adjust program resources to align with their critical path projects which we anticipate will result in a reduction in our revenue from GLOBALFOUNDRIES this year. This has been factored into our Q2 guidance.
We do not expect there to be any change to any other aspects of our agreement with GLOBALFOUNDRIES, in particular with respect to terms related to IP licensing and volume based royalties. We believe this refocusing activity will further strengthen the strategic partnership between GLOBALFOUNDRIES and Intermolecular.
To expand our customer base and diversify our served markets beyond semiconductors, we have invested R&D dollars to develop HPC workflows to accelerate innovation in the solar, LED and display industries. This diversification strategy began to materialize in 2012, and so far in 2013, we are extremely excited to announce the CDP and IP licensing agreement with Epistar.
According to [iSuppli] the LED market totaled $14 billion in 2012 and Epistar was the fourth largest company in the industry. We engaged with Epistar in the second half of 2012 as a micro CDP customer, and we are pleased to have maintained a high micro CDP to CDP conversion rate by signing them to a formal CDP and IP licensing agreements at the beginning of this quarter, Q2.
More importantly, the terms of our IP licensing agreement with Epistar, includes volume-based royalty provisions in line with our target levels. We are looking forward to making broad and tactile contributions to Epistar to provide a competitive advantage for the performance and cost element of their products. At the same time, we [seek and act] to our portfolio of IP to provide a larger and more diversified stream of licensing and royalty revenue over the years to come.
Before I hand the call over to Peter, I’d like to rearticulate our core execution plan for growth and where we stand with respect to each item on the agenda so far in the year. Our growth strategy is focused on three primary factors executing, extending and expanding existing customer programs, adding new customers and opportunities in semiconductors and the third adding new customers and opportunities in clean energy.
With respect to the first, executing, extending and expanding existing customer programs. We successfully renewed and extended our collaborators development program with Toshiba and SanDisk on the back of solid technical progress. With GLOBALFOUNDRIES we believe the focus on critical path projects will drive results and help solidify the opportunity for the growth of high margin licensing and royalty revenue from this customer in the future.
Our recently expanded CDP, with First Solar is off to a strong start with addition of a new dedicated HPC platform that came online in Q1. In addition, our Guardian program is making steady progress in developing multiple advanced glass products for high volume manufacturing implementation.
And finally, in terms of new customer additions, Micron and DRAM and non-volatile memory and Epistar in LED are two Tier-1 accounts, that will be important in shaping the growth trajectory of our licensing and royalty revenues in years to come.
Now I’ll turn the call over to Peter to review our financial results and performance for the first quarter. Peter?
Thanks, Dave. Now I’ll briefly summarize select financial results for the first quarter. Revenue for the first quarter 2013 was $17.4 million which was flat sequentially compared to the fourth quarter 2012, and up 6% year-over-year from $16.4 million recorded in the first quarter of 2012.
CDP revenue represented 62% of total revenue in the first quarter. Product revenue was 18% and licensing and royalty revenue 20%. We had four customers which were each greater than 10% of total revenue during the first quarter. Together, these four customers represented 76% of total revenue in the first quarter.
Net loss in the first quarter of 2013 on a GAAP basis was $1.5 million or a loss of $0.03 per basic share. This compares to net income of $502,000 or earnings of $0.01 per diluted share of common stock in the previous quarter. In the same period a year ago, we reported a net loss of $186,000 or a loss of $0.00 per basic share.
Please review today’s earnings press release for both, GAAP and non-GAAP measures and the reconciliation between our GAAP and non-GAAP results. Key items in our reconciliation from GAAP to non-GAAP measures include the exclusion of stock-based compensation expense. We delivered a non-GAAP net loss for the first quarter 2013 in the amount of $86,000, or $0.00 per basic share. This compares to non-GAAP net income of $1.5 million, or $0.03 per diluted share for the fourth quarter and a non-GAAP net income of $641,000, or $0.01 per diluted share in the year ago period.
Gross margin in the quarter was 55% compared to 62.5% in the prior quarter and 56.1% in the first quarter 2012. A quarter-over-quarter comparison primarily reflects the change in revenue mix. Please note that our financial results in the fourth quarter 2012 benefited from an intellectual property asset purchase by First Solar. In the first quarter, First Solar purchased an HPC platform and signed an Informatics License Agreement, which we booked and recognize as product revenue during the first quarter of 2013.
Total operating expense in the first quarter was $10.8 million compared to $10.1 million in the fourth quarter of 2012 and $9.1 million in the same period a year ago. The year-over-year increase in our operating expenses primarily resulted higher internal R&D expenses aligned with the company’s long-term growth initiatives as we target converting internal research and development into paid CDP programs.
Other net expense during the quarter of $269,000 reflects our quarterly net interest expense of approximately $270,000 related to our two year 4% note with Symyx.
On March 31, 2013, our balance sheet includes cash, cash equivalents and marketable securities of $81 million. This compares to $78.3 million at the end of the fourth quarter 2012. The increase in cash was a net result of $3.8 million in positive cash flow from operations offset by $1.5 million invested in CapEx associated with new R&D programs.
The main driver of cash flow from operations in the first quarter was the growth in deferred revenue from $3.1 million at the end of the last quarter to $5.3 million at the end of first quarter. This increase primarily reflects prepaid licensing and scheduled service revenue with two of our customers.
As of the end of the March quarter and 2013, backlog applicable to the remainder of 2013 revenue was $33.7 million. Please note that this does not include the benefit of deals booked in April including Micron, Elpida and Epistar.
Now, to the finance outlook for the second quarter of 2013, again, I’d like to remind everyone that the following statements are based on current expectations as of today and includes forward-looking statements. Actual results may differ materially. Our guidance for the second quarter of 2013 is as follows.
We project revenue in a range of $16 million to $17 million. This revenue projection includes $12.3 million from our reported backlog at the end of March 2013. And also takes into account the expected realignment of our CDP program with GLOBALFOUNDRIES.
Non-GAAP net income excluding stock-based compensation expense is projected between a non-GAAP net loss of $1 million and breakeven, or between a negative $0.02 per share and $0.0 share on approximately 45 million basic and 49 million diluted shares outstanding.
Now I’ll turn the call back to Gary.
All right, and now we’d be happy to take any questions that you might have. Jamie, could you provide instructions for Q&A, please?
(Operator Instructions) The first question comes from Harlan Sur from JPMorgan.
Harlan Sur - JPMorgan
Thanks for taking my question. So, I’m assuming that the lower CDP revenues from GLOBALFOUNDRIES is offsetting the increase you should be seeing from the Micron and Epistar CDP agreement that you just signed hear in Q2, so is that why the Q2 guidance is so much lower than what we would have anticipated?
Then maybe Dave if you can just give us a little bit more insight into what is it about the partnership with GLOBALFOUNDRIES, they realigned or reprioritize. Clearly, it seems like some of the programs you were working with them on were dropped, and so any color there would be appreciated.
Sure, Harlan. Thanks for the question. So, first of all regarding Q2 guidance our Q2 guidance reflects growth in our CDP and IP and licensing and royalty recurring revenue base both on a quarter-over-quarter and year-over-year basis.
We actually expect this growth in our recurring CDP and IP licensing revenue base to be double-digit quarter-over-quarter from Q1 to Q2, and that is that you just pointed out driven by new business including Micron and Epistar. And also taking into account, a realignment with GLOBALFOUNDRIES, but also it is without the benefit of any one-time transactions such as IP sales or product sales. Recall, that in Q1, we did have a product sale.
So, give me a little bit of color on GLOBALFOUNDRIES. So, the refocus with GLOBALFOUNDRIES, is really a reflection of where GLOBALFOUNDRIES is with respect to its progress in moving advanced, planer transistor technologies into high volume manufacturing and the fact that there is a need for focus right now. And the need for focus is the same level of focus that was required for driving technology from a plainer standpoint is required right now in moving three dimensional transistor FinFET Technology in the high volume factoring, so what we've done is we reallocated and realigned our partnership as a reflection of that focus on GLOBALFOUNDRIES highest priority projects.
Harlan Sur - JPMorgan
Okay. Great, so, what you’re saying is that on a quarter-over-quarter basis, we should see our CDP revenues growing by kind of double-digit sequential growth rates net-net and everything that's going on here?
Yes. So, what I’m saying is that the recurring component of the business which includes CDP as well as the IP licensing revenue base is growing quarter-over-quarter. We do expect that double-digits.
Harlan Sur - JPMorgan
Okay. Great. And then obviously great to see the team continuing to convert the pipeline full-blown CDP engagements obviously with Micron and Epistar. Now behind you obviously I know the team continues to work on a number of other Micro CDP engagements with other new customers and other new end markets and so what’s your confidence level about turning another few more of these Micro CDP engagements into full-blown CDP engagements here in 2013.
Yes. So, we definitely are focusing on closing new deals and increasing this base of current CDP and IP licensing revenue. We're executing and we have been executing on this growth and diversification strategy as we've invested in expanding the capabilities of our innovation platform to open up new market opportunities in 2011. Obviously, we had invested in solar and the result of that, a product of that was expansion, the closure of a deal with the Tier-1 and (Inaudible) the leader in First Solar with the licensing we did last year in 2012.
We made investments in LED last year in 2012 and the product of that was this deal with Epistar, so again a conversion rate from the standpoint of Micro CDPs first of all investing in the capability the establishment of Micro CDPs and then converting those Micro CDPs [deferred loan] engagement has been and continues to be quite high. We are currently making investments in display and we do hope to benefit some of those investments with Tier-1s in the display sector this year.
Harlan Sur - JPMorgan
Great. And then in late February, First Solar announced achieving record cad-tel TV solar cell efficiencies which I think for those of us that cover clean tech; I mean that’s just a huge accomplishment. Obviously, the Intermolecular team did a significant amount of development work with the First Solar team back in the second half of last year and then obviously subsequently entered into a full-blown CDP agreement with First Solar. Is it fair to assume that this recent achievement by the First Solar team in terms of record efficiencies was part in part due to the partnership and the work that Intermolecular had and is doing with them?
So, Harlan, we are certainly not going to take credit for the tremendous advancements that First Solar has made with their technology capabilities. We are making contributions I think on an ongoing basis, but the team at First Solar is world-class and we are thrilled to be partnered with them.
Harlan Sur- JPMorgan
Okay. Great. Thanks a lot, guys.
The next question comes from Edwin Mok from Needham & Company.
Edwin Mok - Needham & Company
Hi, guys. Thanks for taking my question. So, just kind of diving back I guess first focus on the LED when you guys have Epistar, so I guess two-parts question right. First is, can you kind of give us a little more detail in terms of which part of LED production are you guys contributing to our working towards, and if you can give us any idea of the run rate?
So, Edwin, This is David. It's tricky for us to provide that level of detail on both of those topics. Frankly, the first one is confidential in terms of the application space that we are currently engaged with on a technical front with Epistar. The second is, frankly, confidential with respect to the economic terms, unfortunately, around the CDP and IP licensing agreement.
The only thing that I can tell you is that this engagement is very consistent from the standpoint of the overall standard Intermolecular business model of collaborative development programs and it does have volume-based, royalty-based structure in line with our target levels.
Edwin Mok - Needham & Company
Okay. That’s fair. Maybe I'll ask differently then. For this engagement with, now that you guys have engaged with Epistar, right? This doesn’t procure you from working with other LED manufacturer and are you working with other LED manufacturer maybe on a micro CDP level?
Yes. It does not and we do not sign up two engagements that would block us typically from entire space, and we are engaged at the micro CDP level with other Tier-1s.
Edwin Mok - Needham & Company
Great. That’s very helpful, and then going to probably Micron agreement and later Elpida. I guess two questions right? First thing is did you get to step-up in the 25 nanometer ramp in Elpida in the first quarter do you recognize revenue in the first quarter or is it starting in the second quarter? That's first part.
Then second part is on Micron. It sounds like you guys are working on multiple type of work right? When do you expect that any of those will get into production? Are we talking about two years now? Are we talking about next year? Any count, the way you see and think that would be helpful.
Hi, Edwin. This is Peter. I’ll take that. The first question you had with regard to the Elpida uplift. That did begin the first quarter of 2013. And I’ll handover to Dave with regard to your second question on timing of implementation of any CDP activities.
Let me summarize and maybe add little bit more detail. The structure here of the engagement with Micron, so we've aligned with Micron on a recurring licensing structure that allows us really to engage on a broad range of technology applications that involve both DRAM and non-volatile memory.
The collaboration structure introduced the potential for Intermolecular definitive from a much larger and more predictable stream of quarterly licensing revenue structured success keys. So, the objective was not necessarily to maximize the licensing from any one technology application or node, but really to open up a much larger strategic opportunity to benefit both companies and we believe that we have achieved this.
Edwin Mok - Needham & Company
Okay. All right. That's helpful. Last question I guess is, going back to GLOBALFOUNDRY, all right? With this realignment right just if you could you guys putting more focus on three transistors? Is that why you guys are doing realignment and as a result of that as [analogy] are put in place, right? Does that push out when you expect to see incremental royalty from this customer?
Not necessarily. It is just is more reflection of where the resources today are being allocated, which is there are a lot of progresses we made around planer transistor technology applications and there's just an absolute focus. The focus is generally a very good thing. Again, just as a general practice, and there's good convergence and alignment on the objectives here between Intermolecular and GLOBALFOUNDRY is to focus our collective efforts on their highest priority projects.
Edwin Mok - Needham & Company
Okay. Great. That’s all I have. Thank you.
The next question comes from Weston Twigg from Pacific Crest Securities.
(Inaudible) calling in for Wes. On the Epistar deal, just wanted to kind of better understand that little bit better. So, how much R&D will now we'll be shifting to COGS. And as a result will R&D come down now that you can allocate some of the LED R&D to a customer. Thanks.
Hi this is Peter. Yes. With all of our activities when we integrate opportunities from an R&D standpoint, you are correct that they do start out in our operating expenses in R&D. And then as we enter into what we call micro CDPs or initiation of development activities, those resources do allocate to cost of sales as we expand those programs into full-blown CDP and licensing agreements there is a shift of some of the resources from operating expense up to R&D now as we do move some of our operating expense and that’s our goal to move our investments toward paid programs we do tend to backfill some of those resources in our R&D operating expense to focus on the next cycle of where we are going to incubate. As Dave mentioned, we are currently in that phase with display and there maybe others as well.
Okay. Great. Then just bottom line with CDP, where you see for this year? Excluding GLOBALFOUNDRIES, what kind of ballpark could you guys maybe provide for this year?
Yes. With regard to guidance, we provide on a quarterly basis the following quarter and we have provided the guidance for Q2 in total of our overall revenue of $16 million to $17 million for the second quarter. We have stated and we will state again, in the first quarter our licensing and royalties' as percentage of our overall revenue for the quarter was roughly 20% and we expect that to remain consistent.
Okay. Great, so with respect to the Q2, so you said CDP is growing. Is license and revenue declining then or am I missing something?
I mean the main area to look out when you parse out the pieces of our revenue, one of the components and during the first quarter, there was one component that included a product revenue sale in that quarter before that, in the fourth quarter, we had an IP asset sale. And, going into the second quarter, what we're seeing is that our base recurring, base run rate of our collaborative development program and services as well our licensing and royalties are growing overall on a quarter-to-quarter basis excluding any one-time transaction in any quarter.
Okay. Great. Thanks, guys.
(Operator Instructions). The next question comes from Joseph Moore from Morgan Stanley.
Joseph Moore - Morgan Stanley
Hi. Thank you. I wonder if you could talk about the way the Micron agreement was structured in this kind of notion of moving to more of the fixed fee royalty based on IP usage. How did you come up with that a better structure that you favor that they favor or you are flexible and do you think that that opens up opportunities with new types of customers?
Joe, this is Dave. We converged on a structure given some reference from Micron, but there is also some significant benefits for Intermolecular as well. It is a more predictable structure it does eliminate the volatility associated with utilization and ASPs and it provides us with the ability to grow their recurring revenue base of licensing/success fees in a matter that commensurate with our contribution of a vast range of applications.
So, on the second half of your question does it open up opportunities for other partners. We believe it absolutely could. Right? It's much easier we think to engage in this type of a structure that does not require, for example, quarterly audit provisions associated with tracking the volume of products and the associated royalties. So, in some cases, for companies that, we prefer not to disclose the details of their volume and the associated royalties, it's a much simpler structure which still allows us to converge at the same level of value or similar levels of value.
Joseph Moore - Morgan Stanley
Great. Thank you. Then on a different note, to the extent that you take on non-volatile memory customer that’s different than the partners you worked with in the past. Like how does that work I know they haven’t pursing a significant different roadmap. Is there overlap in terms of your R&D resources or does that have to be kept very separate and you just described the challenges of building a business where you are already working with incumbents?
Sure. We firewall off all of our programs, so all of the technology contributors to collaborative development programs are dedicating to a given program. So, we take intellectual property and customer confidential information extremely seriously. We have introduced firewalls and protocols that ensure that our customers' confidential information is secure and protected. Our customers have a clear understanding of what those protocols are and are quite comfortable with how we operate. Otherwise, they certainly wouldn’t trust us to engage at the level of and in-depth that we are with their critical path technology development programs.
Joseph Moore - Morgan Stanley
Thank you very much.
At this time, I’m showing no further questions. I would now like to turn the call back over to Gary Hsueh.
All right. Thanks, Amy. We would like to thank everybody for joining us on the call today and on the webcast. Just a reminder, webcast replay of today’s call will be available on our website at ir.intermolecular.com. Thank you.
Ladies and gentlemen, that does conclude the conference for today. Again, thank you for your participation. You may all disconnect. Have a good day.
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