Microvision's CEO Discusses Q2 2013 Results - Earnings Call Transcript

Aug. 9.13 | About: Microvision, Inc. (MVIS)

Microvision, Inc. (NASDAQ:MVIS)

Q2 2013 Earnings Call

August 8, 2013 8:30 AM ET

Executives

Dawn Goetter – Director, Marketing Communications

Alexander Tokman – President and CEO

Steve Holt – CFO

Analysts

Ryan MacDonald – Northland Securities

Andrew Uerkwitz – Oppenheimer & Company

Tom Szulist – No Limits Capital

Randy Hough – ProEquities

Operator

Welcome to the Second Quarter 2013 MicroVision Inc., Financial Results Call. My name is Loraine, and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded.

I will now turn the call over to Ms. Dawn Goetter, Director of Marketing Communications. Ms. Goetter, you may begin.

Dawn Goetter

Thank you. I’d like to welcome everyone to MicroVision’s second quarter 2013 financial and operating results conference call. In addition to myself, participants on today’s call include Alexander Tokman, President and Chief Executive Officer; and Stephen Holt, Chief Financial Officer.

The information in today’s conference call may include forward-looking statements including statements regarding benefits under existing contracts and the negotiation of future agreements, our competitive advantages, progress with perspective customers, projections of future operations and financial results, product development, applications and benefits, availability and supply of product and key components, market opportunities and growth and demand, plans to manage cash used in operations, as well as statements containing words like believe, goal, path, expect, plan, will, could, would, and other similar expressions.

These statements are not guarantees of future performance. Actual results could differ materially from the future results implied or expressed in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements are included in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission under the heading Risk Factors Relating to the Company’s Business and our other reports filed with the Commission from time to time.

Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changes in circumstances or any other reason.

The agenda for today’s call will be as follows. Alex, will report on the operation results.

Steve will then report the financial results. There will be a question-and-answer session. And then Alex will conclude the call with some final remarks.

I now would like to turn the call over to Alexander Tokman.

Alexander Tokman

Thank you, Dawn. Good morning, everyone. Thanks for joining us today. We are very pleased with the second quarter business results around our key operating objectives. Specifically, we completed second quarter development milestones with our Fortune Global 100 customer. We made progress in securing new supply chain partners to facilitate the PicoP go-to-market strategy. We significantly reduced cash used in operations, and we secured new cash to improve the balance sheet. And finally, we again saw encouraging market news and indicators favoring the emergence of the pico projection market.

More news from the mobile device side, more news from MEMS sources about its market growth expectations, as well as a sneak peek into new and exciting gaming and education applications as showcased by Disney Research, applications that can be brought to life, thanks to the display and the imaging technology such as ours.

Let’s focus briefly on the most recent market development. In April, we announced an important $4.6 million development agreement with the Fortune Global 100 major electronics brand to incorporate our patented PicoP display technology into the engine produced that could enable a variety of new products for this specific global OEM.

During the second quarter, we began to work side-by-side with the OEM in the development of their display engine that is woven on our technology. Both companies made solid progress and met the key second quarter milestones on the development activities under this agreement.

Concurrently, with the development activities, we are also engaged in commercial negotiations for licensing and component supply. Our new partner has outlined its vision and a preliminary roadmap for its products resulting from this activity. And today, we are very pleased by its approach and level of engagement.

We continued to progress our business development activities to secure additional design wins for this year. Our current primary targets include several consumer electronics and automotive companies that can benefit from PicoP display technologies distinguishing attributes.

Today, PicoP display solution possesses attributes unmatched by others. It is the only HD capable, focus-free pico projection technology in the market that offers an immersive experience and it can be delivered in a tiny package whose size does not increase as the brightness increases.

It provides exceptional brightness to power ratio that affords a multi-hour operation from a single battery charge. Higher brightness at a low power are the two of the most desirable attributes for the mobility industry for this type of application. Today our brightness to power consumption ratio is superior to any other competitive solution and we believe it will remain as such in the foreseeable future.

Let’s now move onto supply chain topic. We’ve made significant moves during the second quarter to build a stronger supply chain in order to facilitate the future adoptions of PicoP display technology by OEMs around the globe. This activity as you can imagine is targeted for those customers who are not vertically integrated or simply want a more standardized third-party solution based on our technology.

Our goal is simple, to architect an expanded supply to provide these OEMs with several sources for the key components including MEMS, ASICS and display engines to integrate into their products, and our Image by PicoP ingredient brand and the licensing model.

Finally, in line with our objective of aggressively managing cash using operations, we have shown tangible year-over-year improvements on our key financial metrics during the second quarter. Our cash used in operations was reduced by nearly 60%. Both operating net losses were reduced by greater than 30%, while the revenue was up by 44%.

Steve will take over at this point, and provide you with full details and color. Steve?

Steve Holt

Thank you, Alex. As Alex mentioned, we had good results in the quarter with increased revenue, lower cash usage at the raise of 5.5 net proceeds from an equity offering. First, I’ll talk about revenue. Second quarter revenue was $1.9 million, up 44% from $1.3 million in Q2 of 2012. The $1.9 million is comprised of $917,000 of product revenue, $880,000 of development revenue, and $73,000 of contract revenue. First half revenue was $3.7 million, up 21% from $3 million for the first half of 2012.

Q2 operating expenses were $4.4 million, which is lower than the operating expenses of $6.3 million in Q2 of 2012. This 29% reduction in the operating expenses over the prior year reflects the cost reductions from the restructuring that we implemented in mid-2012.

Similarly for the first half, operating expenses were $9.1 million, down 33% from the $13.5 million in the first half of last year. The operating loss and the net loss for the quarter was $3.4 million or $0.13 a share. This is $1.5 million lower than the operating loss and the net loss of $5 million or $0.26 per share in Q2 of 2012.

And the first half operating net losses were $7.1 million, down 52% from the same period last year. First half net loss per share was $0.27 versus $0.82 for the first half of 2012. That’s an improvement of 67%.

Now onto cash. Cash used in operating activities in Q2 of 2013 was $2.8 million, down 59% from the $6.8 million used in Q2 of 2012. The improvement is due to lower net loss and improvements in working capital. For the six months ended June 30, 2013 cash used in operations was $6.3 million versus $13 million used in the six months ended June 30, 2012. And cash on hand was $6 million at June 30, 2013.

And then finally our order backlog. Total order backlog at June 30 was $3.8 million. Of that total, $3.4 million is related to our development agreement with the Fortune Global 100 electronics company.

That concludes the financial results. At this time, we will now open it up for questions.

Question-and-Answer Session

Operator

Thank you. We will now begin the question-and-answer session. (Operator Instructions) And our first question comes from Ryan MacDonald from Northland Securities. Please go ahead.

Ryan MacDonald – Northland Securities

Hi guys, Ryan MacDonald on for Mike Latimore. First off, could you give us a bit more of an update on top five prospects for – and additional deal this year and next year, and then maybe what you think the likelihood is that you could sign maybe another Fortune 100 company or customer before the end of the year?

Alexander Tokman

Okay, Ryan I’ll take this. So as I mentioned, we did made progress with – on both, automotive and consumer fronts with some of the top five targets. In terms of – and our goal is still to develop additional wins this year on top of what we announced in April with the Fortune Global 100.

In terms of predicting whether they will be from Fortune Global 500, it’s difficult at this point in time, but some of our targets do include companies that fall into this list, but we could not at this point guarantee that the next deal would be with somebody like this. We just know that we have them in the mix, but the predictability of this and timing, specific timing is very difficult.

Ryan MacDonald – Northland Securities

And did any targets move in or out of the top five during the quarter, was there any change to that?

Alexander Tokman

Yes, we had a couple of shifts, absolutely.

Ryan MacDonald – Northland Securities

Okay. And then any additional cost on changes that we should expect in the second half of the year here?

Alexander Tokman

Recall that we completed restructuring around middle of last year. And the OpEx structure has been designed at that point in time is what we are executing – what we’re using to execute the current activities. So we don’t anticipate overall reduction for the year versus previous year, yes.

Ryan MacDonald – Northland Securities

Okay. And then just looking towards additional sources of revenue for the second half of the year, I mean the majority of that revenue going to be coming from the development agreement and beyond that, is there – what are your thoughts on revenue generations in the second half?

Alexander Tokman

Good question. Until the royalty licensing and component sale revenue come in, once the customers start introducing their products, we expect that most of our revenue will come from combination of development agreements with the upfront fees, potentially some license fees and customer support activities. So, correct.

Ryan MacDonald – Northland Securities

Okay. And then just finally, just a question I guess surrounding on some further technology application, I mean Google Glass seems to be sometimes very popular, it might need some pico projector technology, is that an area where you guys want to have an opportunity to speak with them?

Alexander Tokman

Absolutely. Google Glass is an application that kind of an cross-hair, while the strategy since 2006. Recall that when we reorganized we said three areas we’re focusing on, pico projection, automotive displays and eyewear displays. So absolutely. The reason they were prioritized in such an order because the complexity of product increases as you go from pico projection to automotive head-up display to eyewear display for a variety of reasons.

One of them was to make eyewear application successful, you really need special contents, see-through content that had not existed in the past. And companies such as Google, Microsoft and others have ability to influence this which is what Google is doing. So we are very happy to see what Google is doing with – is trying to introduce this product. And our engine technology and some of the optical IP that we develop is very applicable to what they and others are doing.

Ryan MacDonald – Northland Securities

All right. Thanks a lot guys.

Operator

Thank you. And our next question comes from Andrew Uerkwitz from Oppenheimer & Company. Please go ahead.

Andrew Uerkwitz – Oppenheimer & Company

Hi, thanks guys. Just can you – on your Fortune 100 design win here, could you go in a little bit more detail on the roadmap or maybe insight yet, as far as – I think it seems like I think we’re doing multiple products. If there is going to be – do you have any idea when it’d potentially be launched, or could you give us an update on some of these – what the next milestones are?

Alexander Tokman

It’s a great question, Andrew. I’m pretty sure that most of the listeners want to hear this. We’re somewhat limited in how much we can disclose other than, they pay us $4.6 million over the next 13 months for development starting in April of this year. And the good news from what we’ve seen today, we are pleased with the fact that they are very active. They’ve been actually very proactive in defining type of product – new product categories and targeting different product portfolios within their existing infrastructure.

And the good news is it’s not a single product, it’s going to be – they have plans for variety of different products, whether they are attached or working in conjunction with products from consumer electronics sector, from variety of spin-offs in consumer electronics. I can’t give you any more details, otherwise I’m going to start disclosing the information that they prevent us from [ph].

Andrew Uerkwitz – Oppenheimer & Company

Yes, I’m sure and I understand. I appreciate what you told so far.

Alexander Tokman

All right.

Andrew Uerkwitz – Oppenheimer & Company

And then just kind of spinning on the wearable text stuff, aside from actually put the pico projector so you’re aware both glass. Do you think just kind of the buzz surrounding either a watch or glasses or just general accessories that could help kind of propel new ideas for pico projector attachments for gaming and those sort of things? Have you seen any excitement there?

Alexander Tokman

I think it’s going to be dependent on who is doing it and how well they thought of the ecosystem upon introducing this type of product. Apple in the past have shown historically that they do a very good job of assessing what are the – not just the product is going to look like and feel like, but also what type of information and what other ecosystem players you need to have to make it successful application.

So we heard Apple is working on this, we heard others. I would put a lot more bet on Apple being more successful and everybody else is copying it, versus the other way around. And with Google Glass, the judgment is still out, as you know, it’s been still in beta testing. There has been kind of positive and negative. The good news is that Google is really seeking of going after this application.

We know other large companies are doing similar type of work, and we are actually very excited because there are six different attributes that need to come together to make successful eyewear product. You have to have the right display engine technology, you have to have the right optical technology to encapsulate this into ophthalmic lens, you have to have the right user interface, you have to have the right industrial design, you have to have the right content, and then delivery.

We control – or we contribute heavily to the first two attributes, but we have no control over the other four. So with Google addressing this Google Glass project, we’re happy to see the progress they made on the other areas that would facilitate this market.

Andrew Uerkwitz – Oppenheimer & Company

Sure. And then just one last question around auto. I was at car shop the other day, it seems like quite a few more cars are implementing head-up display. Are you seeing – what kind of activity – is business picking up there, is interest picking up, is there waning, how do you see that?

Alexander Tokman

The interest has picked up tremendously since the second half of last year. Once the players realize that the laser-based head-up display is actually a viable solution, given that the green laser situation seem to be addressed or alleviated greatly, there has been increased interest since the late last year and it had not wane until now. There is a lot of carmakers and they are tier ones who are – we are in discussions about how to get laser head-up display to market. And again one or two key people from top five are from that segment.

Andrew Uerkwitz – Oppenheimer & Company

Great. Well I appreciate your time and look forward to seeing in September.

Alexander Tokman

Thanks, Andrew.

Operator

Thank you. And our next question comes from Tom Szulist from No Limits Capital. Please go ahead.

Tom Szulist – No Limits Capital

Hi Alex, how are you?

Alexander Tokman

Hi Tom.

Tom Szulist – No Limits Capital

Green lasers. Can you give us an update, if we’re seeing any change in who the players are, and if there is any pricing change, if we’re starting to get into mass production now?

Alexander Tokman

Well we have two players have been commercially introduced their products or their offerings last year in second half of last year. One from Japan and one from Germany, and then one also very large Japanese player announced they will introduce their own version of green laser in the second half of this year. So we’ve got three suppliers right now that we are looking at. All of them are established, all of them have domain expertise in this area.

And to-date, everything that they told us in terms of what’s going to be available at what price have come to fruition. So we don’t really negotiating directly with them because what we do – we point them to our supply chain and we help our supply chain to get favorable pricing from these entities, but again what we’ve seen right now is more than sufficient to start pico projection market and to take it into higher volumes once the adoption takes place.

Tom Szulist – No Limits Capital

Good. Then the original goal to get additional contracts signed by year-end, whether it would be a Fortune 100 or a non-Fortune 100, that’s still on the table for you or you haven’t changed your outlook there?

Alexander Tokman

Correct. It’s still our goal.

Tom Szulist – No Limits Capital

Okay. And could you talk a little bit about IR activities, what you – do you see that starting to step up and do you – I see you have one thing planned that was announced for September?

Alexander Tokman

Yes. We will be attending several conferences. One with Oppenheimer and one with some additional conferences that we’ve planned to basically get investors updated – fundamental investors updated on the activities and the progress we are making.

Steve and I have trying and will execute non-deal road shows periodically, and obviously we will on – dependent on the timing and dependent on the budgets, we’re planning to do some oversea trips to inform foreign international investors as well.

Tom Szulist – No Limits Capital

Good. One last question relating to gaming. Have you seen any additional interest in that area? Have you started to find that they are looking for applications that they can start to bring to reality?

Alexander Tokman

Yes. You’ve seen the example. I don’t know how many people on the call have seen that Disney Research issued an video couple of weeks ago I think. And they basically develop their own internal technology that (inaudible) technology to provide totally new look and feel for interactive gaming and educational type of applications.

It’s a perfect example of R&D work that we have been participated in over the past couple of years. Disney activity has started in 2008, when we supported them with the technology, they did not tell us a lot at that time, what specifically they will be developing, but two years later they came back with significant progress from what we would – the video has shown.

We have activities such as this that we haven’t announced probably because again when we participated in these, our customers really controlled the communication flow whenever they were ready discuss this. So we do have activities such as Disney Research with other entities, but they haven’t come to life yet because they probably either not ready to communicate probably or they still maturing certain aspects of this – of any particular application.

Tom Szulist – No Limits Capital

One last question related to that. The internal activity that you’re capable of with your system, I noticed that some of these companies are looking to put virtual keyboards in place with the tablet or whatever. How accurate, and is that an application that would be part of your technology or are there other technologies that maybe more suitable for that particular application?

Alexander Tokman

Our interactive touch or air touch application is broader than just a keyboard. So there is a lot of companies that can do simple laser keyboard projection. Actually the first one I remember when I first started here in 2006, there was a company in U.K. that introduced this product. Our air touch product doesn’t normally allows you to create a keyboard if you need to, but also more importantly, use your hand gesture to articulate objects in air, that are projected on any surface. So yes, our technology is – can do this, but it can do a lot more than that.

Tom Szulist – No Limits Capital

Great. Thanks. Keep up the good work.

Alexander Tokman

Thanks, Tom.

Operator

Thank you. And our next question comes from Randy Hough from ProEquities. Please go ahead.

Randy Hough – ProEquities

Thank you. Hi, guys. Alex, let me bring up a name from the past year, and it came to mind when you were kind of indicating expectations for revenues in the second half of the year. It’s been over a year if I have the timing right since Pioneer launched its head-up – aftermarket head-up display product. Can you give us an update on how the successive that has gone, and if it hasn’t gone well, why it hasn’t gone well?

Alexander Tokman

It’s a great question. I am pretty sure it’s on the mind of every listener as well. It’s a good question really. So a couple of things. First of all, we fulfilled original Pioneer offer through Q2. We delivered everything on-time, with quality that exceeded everybody’s expectation. So basically our components for the solution that they put inside their head-up display, that program has completed very successfully. Pioneer has been pleased. We have good relationship.

One of the things as you know that – and again, I mentioned it over the past six months, Pioneer as a company did not have a very good financial year last fiscal year. As a result, they’ve gone through a significant restructuring and reorganization. And that process, I’m pretty sure distracted them from focusing pull attention on new products. And given that activity which we anticipate – which we learned about at the end of last year, we reduced our expectations for significant reorder for 2013 for the aftermarket head-up display.

However, we are still in discussions with Pioneer for their different product, embedded head-up display. And there are many car companies as I mentioned earlier, that are very interested in embedded head-up display rather than aftermarket head-up display. Other than this, if I would provide additional color on what happened or what is happening with them, it would be probably not desirable because they have their own reporting structure, they explain their own results and what’s successful and what’s not successful. So it would be not wise for me to comment on their performance.

Randy Hough – ProEquities

Okay, fine. Thanks. That’s enough for me. That’s what I asked for.

Alexander Tokman

Okay.

Randy Hough – ProEquities

Let me take you to this idea that you put out a number of times in past Alex of 12 to 18 months in terms of cycle time from when you first start talking to respective customers, and when they might make a decision to go forward with production. So keeping in mind that the availability of test kits began in Q1 of 2012, we’re now well into the 18 months cycle, and you’ve commented previously that you’ve identified your top five that someone else earlier alluded to, and what have you, and that perhaps some number of those moved out of the top five and what have you. So I guess I’m looking for a general comment, as you’ve gone through the 18 months since the kits first went out, what you’ve learned in terms of the process that you have to go through in selecting one particular customer over another? Those that have faded from the top five list, what was the reason? Was it incompatibility on terms or the inability to come together on terms of a relationship, or was it regarding that the technology was not suitable for what they had in mind? Could you give us some color on what you’ve learned?

Alexander Tokman

Absolutely.

Randy Hough – ProEquities

Yes.

Alexander Tokman

Absolutely. So just – you’re absolutely right. So we started the evaluation stage of this cycle in March of last year. And it lasted for about, I would say until November. So between March and November we shipped units – evaluation units to about 50 entities. And during that period, most of them came back with kind of, yes, interested to work with you; no, I’m not interested working with you. Majority of those 50 said, yes, we’re interested working with you. Then at the end of the year we had to rack and stack them, pick top five and start focusing on top five.

Now what happens in some of these cases – so sometimes when it doesn’t work, it’s not because somebody loses some interest, it’s because there is incompatibility or disagreement on some of the key terms. So for example, we want people who we sign to put stake in the ground and give us some level of commitment that this is tangible to us, we know that there is a commitment. And not everybody is comfortable in doing this.

Larger companies more often bully smaller companies and ODMs, so we have to be firm and we have to basically determine after progressing through negotiations, and let’s say we want to discuss our royalty confirm when to discuss to upfront payment. If we don’t feel that we get in the fair share, or the conditions have changed from initial understanding, then we try to correct it. So if we can’t correct it, we replace that person and we’ll put somebody else.

Randy Hough – ProEquities

Okay. But in general, if you see the desirability of our technology for applications in the marketplace given the availability of size production for the natural green laser. Do you see that still strong?

Alexander Tokman

Absolutely. To be honest with you, if people did not feel comfortable about supply, we would not have that level of interest because the interest starts from – I did confirm what you tell me, so I did – so there is a checkmark. Second, I believe that the supply chain that needs to support this is there. So these two checkmarks I think are good and positive.

Again, the progress is often determined by the negotiations on the key terms whether they are supply terms, whether they are distribution marketing terms. And the level of commitment which we measure in the form of investment, that specific partner needs to put into the program internally at their place and with us to make it a successful proposition, because keep in mind each of these activities take a lot of engagement from our side to support them. We don’t want to support somebody, who doesn’t want to pull their own share.

Randy Hough – ProEquities

Well, I guess I’ll just close with this last comment, I would think that, I am trying to create in my mind an idea of the usefulness, the utility of our technology is of such a magnitude that minor things with large companies like development funding would be offset by the desirability of the technology, but I am getting a sense that maybe I am little too optimistic about that.

Alexander Tokman

No, just remember that each large company comprises – think about it as a feudal society, each large company combined of business units. And they all compete against each other and they compete against different priorities. So sometimes even though desire is there in some cases, they may not have the budget to support their desire, so they will look out to carry the most of the weight and we would like to avoid situations like this.

Randy Hough – ProEquities

Okay, thanks Alex. I’ll get back in the queue.

Alexander Tokman

Okay.

Operator

Thank you. (Operator Instructions) And our next question comes from Ryan MacDonald of Northland Securities. Please go ahead.

Ryan MacDonald – Northland Securities

Hi guys. Just last one follow-up question. From some of the consumer electronics companies that you’ve been in discussions with about potential deals, I mean does there seem to be greater interest in an opportunity for an embedded solution or something is maybe like an accessory to a smartphone that’s like embedded in a case or something like that?

Alexander Tokman

It’s excellent question, Ryan. Usually people who come to us and who engage with us, they are interested in both, but typically I would say eight or nine out of ten times, they want to go through accessory attachment type of products first followed by the embedded.

Ryan MacDonald – Northland Securities

Okay. Thank you very much.

Operator

Thank you. And our last question – our next question comes from (inaudible). Please go ahead.

Unidentified Analyst

Hi, good morning, Alex.

Alexander Tokman

Good morning, Henry [ph].

Unidentified Analyst

I had a question with respect to the Fortune Global 100 company, and development agreement and the timing of a potential commercial agreement. And I was wondering with respect to the commercial – sort of commercial licensing agreement, would you expect that you’d have to sort of fulfill the development agreement before that would happen?

Alexander Tokman

No, we’re actually conducting this in parallel. So we started to develop – during develop program, we’re in the process of negotiating the supply and royalty terms.

Unidentified Analyst

And so I guess then as that program moves along and gets closer to completion on the development agreement then the potential for signing a commercial agreement would sort of arise along with them?

Alexander Tokman

Absolutely.

Unidentified Analyst

And one last question on the red, green lasers. It sounds like you have two suppliers and the third supplier before year-end. Do you think there will be additional suppliers at some point in the future after that?

Alexander Tokman

I think once the market picks up, absolutely. There are just no suppliers. They are slowly behind, there is at least two that we know of that they are behind the first three, but yes, absolutely. We would see – once the pico projection market takes up, we expect that others would enter this game.

And just think about this, a lot of people ask us consistently, what are the markets for green and blue lasers, and the red lasers? And if you think about this, there is only application that drives it, pico projection, whether it’s consumer pico projection, whether it’s automotive displays or whether its eyewear displays, because red lasers which was the staple of the DVD technology (inaudible), they’ve been replaced by Blu-ray which is blue laser. And green laser has no application other than pico projection. So these large companies must have done enough homework to understand that there is a future in this market and that’s why they are doing it.

Unidentified Analyst

All right, thank you.

Operator

Thank you. And I would now turn the call over to Alexander Tokman for closing remarks. Please go ahead.

Alexander Tokman

Thank you. We made solid progress in Q2 against our primary three goals for 2013: first, generate new business opportunities; second, expand key supply chain; and third, aggressively manage cash using operations. We’re very excited about our engagement with the major global electronics brand, and plan to actively support our new customer this year to both enable their solution and to progress the negotiation on the licensing and supply terms.

We’re continuing to progress new opportunities and seeing on a modest pace [ph] and securing new supply chain partners. We regularly see news and stories that illustrates favorable conditions for pico projection market. For example according to recent Yole Développement Report MEMS is on the dynamic growth path expected to double in the next six years to $23 billion, just MEMS.

All of these are good indicators. We are pleased with second quarter results and looking forward to updating you on the progress in about three months. Thank you for joining us today on behalf of Dawn, Steve and myself. We’ll see you in three months.

Operator

Thank you. And thank you ladies and gentlemen. This concludes today’s conference. Thank you for participating. You may now disconnect.

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