Data I/O Corp (NASDAQ:DAIO) Q3 2018 Earnings Conference Call November 1, 2018 5:00 PM ET
Jordan Darrow - IR
Anthony Ambrose - President, CEO & Director
Joel Hatlen - CFO, COO, VP of Operations & Finance, Treasurer and Secretary
Jaeson Schmidt - Lake Street Capital Markets
Robert Anderson - Penbrook Management
Avram Fisher - Long Cast
Mike Kaldron - ARC Financial Services
Dan McLean - Meta
Ladies and gentlemen, good afternoon. Thank you for standing by. Welcome to the Data I/O Third Quarter Financial Results Conference Call. [Operator Instructions]. As a reminder, today's conference is being recorded. I would now like to turn the conference over to your host, Investor Relations, Mr. Jordan Darrow. Please go ahead.
Thank you and welcome to the Data I/O Corporation Third Quarter 2018 Financial Results Conference Call. With me today are Anthony Ambrose, President and CEO of Data I/O Corporation, and Joel Hatlen, Chief Financial and Operating Officer of Data I/O.
Before we begin, I'd like to remind you that statements made in this conference call concerning future events, results, revenues from operations, financial position, markets, economic conditions, estimated impact of tax reform, product releases, new industry partnerships, and any other statements that may be construed as a prediction of future performance or events are forward-looking statements, which involve known and unknown risks, uncertainties, and other factors, which may cause actual results to differ materially from those expressed or implied by such statements.
These factors include uncertainties as to levels of orders, ability to record revenues based upon the timing of product deliveries and installations, market acceptance of new products, changes in economic conditions and market demand, pricing and other activities by competitors and other risks, including those described from time to time in the Company's filings on Forms 10-K and 10-Q with the Securities and Exchange Commission, press releases and other communications.
The accuracy and completeness of forward-looking statements should not be unduly relied upon. Data I/O is under no duty to update any of these forward-looking statements.
I would now like to turn the call over to Anthony Ambrose, President and CEO of Data I/O.
Thank you very much, Jordan. And I'd like to welcome everyone to the call. As usual, I'll comment on 2018's third quarter results and our view of the overall market, and then I'll turn it over to Joe Hatlen, our CFO/COO for more details on the financials. With our third quarter results we continued to produce solid financial and operational performance in fiscal 2018, following an unprecedented 2017. We were profitable in the quarter and our quarterly bookings exceeded revenue.
With today's announcement, I am reminded of our call that we had at the end of February 2016. At that time, we were coming off some cyclical weakness. We saw automotive growth accelerating. At that point, it was only 39% of our revenue. We had some great product momentum and we were investing heavily in the future in our R&D programs. At that time, we also announced a share buyback. Then as now, we chose to demonstrate our confidence in the future of Data I/O.
So how is nearly three years ago relevant to today? The investments we made in 2014 and 2015 ultimately paid off in the strong growth in revenue, market share, and profitability we've seen in the past couple of years. Today we're continuing to invest in the technologies necessary to help our customers win in the automotive and IoT markets. On many calls we've discussed our thesis about automotive growth. Industry forecasts from leading automotive OEMs show about a 10% to 15% CAGR for semiconductor content in cars, and a larger increase of 30% to 40% compounded annual growth rate in the total market for flash memory in cars, the flash memory content growing to about 1 to 2 terabytes in the next several years. This content growth is being driven primarily by infotainment systems and other features in autonomous and connected cars.
The thesis for Data I/O is that automotive is the source of our current and future growth, and that thesis remains intact. Our strategy is unchanged and remains that we will extend our [indiscernible] in automotive with ever better products, better service, global support for the tier one customers and their EMS and programming center partners. Drilling down a little bit, the dominant memory architecture for automotive today is eMMC, which is a managed NAND based device. An evolution is underway from the current eMMC flash memory towards UFS or universal flash storage.
We're ahead of the curve with products in the market, a strong roadmap for future performance gains, and an ability to upgrade the large and growing installed base of PSV7000 and PSV5000 systems to support UFS. When combined together, these make our platform compelling for the automotive sector. During the third quarter, we announced a Bosch agreement extension of our original five-year agreement, extended by another 2.5 years and also adding support for UFS products. Also during the quarter, we accepted an order from an existing eMMC automotive customer that was upgrading to UFS. We also added a new EMEA-based automotive customer. We also won our fourth industry award for U.S. support on our LumenX programmer, which is sold with our PSV handlers.
Significant developments for SentriX platform were also announced in the third quarter. A fourth SentriX system was deployed to a U.S. based customer. A partnership with DigiCert was formed to enable their certificate management solutions on the SentriX platform. Data I/O also joined a trust firmware project alongside fellow board members from ARM, Texas Instruments, Google, Cypress Semiconductor, and Linaro. SentriX is gaining recognition within the industry. Last month, we were also invited to the Arm TechCon 2018 Conference to present on security provisioning in the firmware design process and to serve as a panelist with executives from SecureThingz, Arm, and Rambus to discuss greater security for internet of things electronics.
The industry partners aligning with us on the SentriX platform validate our strategic direction. We are also seeing complementary technologies in support of IoT and security, such as 5G wireless, also being deployed. We see security permeating all segments of the microcontroller market over time and our investments in SentriX increasingly support this transition and lay the foundation for superior long term market share growth. Industry analysts from ABI estimate the microcontroller market at over 20 billion units. Further, they estimate the addressable market of secure microcontrollers and secure elements at several billion units in the next five years.
Today, nearly three in seven of Data I/O's existing requests for device support are microcontroller based and we believe our customers program several hundred million microcontrollers every year using Data I/O technology. The move to security is where all of the microcontroller growth is expected to be and opens up an opportunity nearly 10 times as large as our current core microcontroller business in our opinion. Because of this predictable, relentless, long term move to security in the microcontroller market, we believe that our SentriX platform will provide another avenue of long term profitable growth, much the same way that our multi-year investments in programming technology for the automotive electronics supply chain led us to the position we're in today.
In addition to developing great new products, we've gone to great lengths to remove costs, optimize our supply chain, and improve processes, which lead to sustainable profitability. Our gross margin as a percentage of sales over the trailing four quarters at approximately 59% bears out the successful implementation of our cost reduction and continuous improvement efforts. Over the past six years, our annualized gross margins have increased from about 48% to over 59%. Certain tariffs and commodity prices have partially mitigated the overall impact of our cost reductions. Our operation team is continuously evaluating alternatives to minimize tariff expenses while preserving quality and delivery performance.
With our operating performance, our outlook for continued long term growth, our strong financial condition, and a mission to deliver value for shareholders, the Board has authorized a $2 million stock buyback program to begin in the fourth quarter and run for about one year. We'll update you more on the specifics of the plan as it's implemented. Now again, as in early 2016, we have a very clear plan to drive innovation, deliver market share gains, continuously improve our day-to-day operations, and position ourselves for the next wave of growth.
With that, I'd like to turn the call over to Joel Hatlen, our COO and CFO, for a more detailed review of the numbers. Joel?
Thank you, Anthony, and good day to everyone. Revenues for the third quarter of 2018 were $6.5 million, compared to $9.6 million in the third quarter of last year and $7.2 million in the second quarter of this year. The year-over-year results reflect a very strong 2017 with the majority, 61%, of our orders during the third quarter of 2018 continuing to be generated from automotive electronics OEMs.
On a geographic basis, international revenue represented approximately 87.6% of total revenue for the third quarter of 2018, as compared with 86.5% in the second quarter of 2018, and 93.6% in the third quarter of 2017. Sales in the third quarter, as compared to the same period in 2017, were negatively impacted by $89,000 due to unfavorable foreign currency exchange fluctuations.
Order bookings were $7 million in the third quarter of 2018, down 15% from $8.2 million in the prior year period, and sequentially down from $7.2 million in the second quarter of 2018. The variation in revenue amounts and percentages versus orders--to changes in orders relate to changes in backlog, deferred revenue, and currency translation. I'll speak more about currencies in just a moment.
For the third quarter of 2018, gross margin as a percentage of sales was 63%, compared to 62.1% in the third quarter of 2017, and 59% in the second quarter of 2018. For the third quarter of 2018, gross margin came in higher than our target range of mid to upper 50s. The higher than anticipated gross margin reflects primarily a favorable product mix. Our margins have also benefited from cost reduction initiatives and other factors, including foreign currency exchange fluctuation variances that had a negative impact back in the first quarter of this year and a positive impact on both the second and third quarters of this year.
Operating expenses were $3.7 million in the third quarter of 2018, down from $4 million in the second quarter of 2018, $4.1 million in the first quarter of 2018, and $4.1 million in the third quarter of 2017. Compared to the third quarter of 2017, the lower operating expenses were due primarily to channel commission and incentive compensation, which were down $528,000 due primarily to sales volume and related financial results, offset in part by higher equity compensation of $109,000. The level of operating expenses in dollars in 2018 is consistent with our planned continued investment in automotive and our next generation SentriX security provisioning platform.
As usual, we remain vigilant in managing our expenses and reducing costs where feasible while investing in our platform technologies.
In accordance with generally accepted principles--accounting principles, or GAAP, net income in the third quarter of 2018 was $342,000, or $0.04 per diluted share, as compared to net income of $1.7 million, or $0.20 per diluted share in the third quarter of 2017, and $486,000, or $0.06 per diluted share, in the second quarter of 2018.
Included in non-operating income is currency gain of $108,000 in the third quarter of 2018, a currency loss of $66,000 in the third quarter of 2017, and a currency gain of $269,000 for the second quarter of 2018. The impact of changes in the U.S. dollar against foreign currencies during the third quarter was primarily related to the strength of the U.S. currency compared to the RMB in China and the euro.
EBITDA, or earnings before interest, taxes, depreciation and amortization, a non-GAAP measure, was $742,000 in the third quarter of 2018, compared to $2.1 million in the prior year period, and $796,000 in the second quarter of 2018. Equity compensation expense, a non-cash item, during the third quarter of 2018 was $282,000 and $173,000 in the third quarter of 2017, and was $473,000 in the second quarter of 2018.
Adjusted EBITDA, excluding equity compensation, was $1 million in the third quarter of 2018, compared to $2.3 million in the prior year period, and $1.3 million in the second quarter of 2018. Please see our press release or SEC filings for a discussion and reconciliation of these non-GAAP financial measures.
Moving on to the balance sheet, receivables of $2.8 million at the end of the third quarter of 2018 were down from $5.4 million at June 30, and from $3.8 million at the beginning of the year. The lower receivables was primarily due to an acceleration of collections during the quarter. We expect this level of receivables to return to a more normal level in the fourth quarter.
Data I/O had $1.9 million in deferred revenues at the end of the third quarter, compared with $2.5 million at the end of the second quarter, and $1.9 million at the end of the fourth quarter of 2017. Backlog at the end of the third quarter of 2018 was $3.1 million, compared with $1.9 million at the end of the second quarter, and $4 million at the end of the fourth quarter of 2017.
The Company's cash position at September 30, 2018 was $18.9 million, up from $16.6 million at the start of the quarter and $18.5 million at December 31st. We also expect cash to revert to a level more consistent with the return of receivables to a more normal level and to be impacted by any share repurchases that may occur. Our net working capital at the end of the third quarter was $20.6 million, up from $20.2 million at the end of the second quarter, and $19.5 million at the end of 2017. $12 million of our cash was in the United States and the balance was with foreign subsidiaries.
The Company remained debt-free and had approximately 8.5 million shares outstanding at September 30, 2018.
That concludes my remarks, and I'll pass the call back to Anthony.
Thank you very much, Joel. Just before we open up for questions, I'd like to remind everyone that we'll be meeting with investors in Milwaukee and Chicago next week and presenting at the LD Micro Conference on December 4 in the Los Angeles area. Data I/O will also be presenting at the Global Semiconductor Alliance Senior Leadership Event in Taipei next month, and at the Electronica Trade Show in Munich, also in early November. If you get a chance, we'd love to have you stop by and say hello.
Now Operator, let's begin the Q&A segment of the call, please.
[Operator Instructions]. Our first question today comes from Jaeson Schmidt with Lake Street Capital Market. Please go ahead.
I just want to start with what you're seeing from a visibility standpoint. Have you seen any significant changes in your visibility over the past three months? And relatedly, are you seeing any impact from the--from trade war concerns or tariffs?
Yes, Jaeson. Thanks very much for joining the call. Regarding the business, we talked a little bit about this and put out an 8-K on it, oh, I don't know, a couple weeks ago. But we really saw a nice surge in bookings in September. It was a very strong month for systems orders. And October was also a very good month. So I mean, we came out of the hot--long hot summer pretty strongly there in the fall. I don't think we've changed our position on ultimate visibility. Our funnel sort of looks like our sales funnel normally looks. This--the areas that are strong are the areas that have been traditionally strong for the last several years, namely automotive. We're still seeing some programming center demand, but by and large, they bought a lot of capital last year. And it's our intent to go talk with our big customers here over the next several weeks and get their idea of what 2019 might look like.
But really, no change in our long term thesis that automotive grows. It has a nice long term growth rate. And you superimpose a CapEx cycle on top of that. And then, IoT is the same thing. I will say that we're seeing a lot more people moving into a zone of how I do security on IoT and beyond whether they feel like they should do security. Whether that's government regulation, whether it's a sense that they really need to protect their brand, whether it's a realization that there are more products out there now they can use, it's a little bit easier to get things done. Some of the partnerships we've announced have hopefully simplified the process for them.
So in terms of visibility, we--again, the long term trend around IoT security we think continues to become more and more favorable.
And then, your second question on tariffs. We're definitely seeing some nuisance I would call it at this level. It might be--maybe it's more of a nuisance to our operations team. But it's not going to be the end of the world. It will be--it's working against us in our cost reduction activities. But because we have operations in both China and the USA, we have the flexibility to build where people consume, if it really gets to that point. And in the short and medium term we have ways to sort of minimize the nuisance and cost of tariffs. It is work for our team. It's work they could be better spending somewhere else. But it will be a factor, but it's not going to be the end of the world.
And just a quick housekeeping. What was the revenue breakdown in Q3 between equipment, consumables, and software?
From a year-to-date standpoint it's 65% capital equipment. It was 24% adapters and 11% software and maintenance contracts.
Yes. So Jaeson, year-to-date it's sort of right on the model we look at. It might have been a little richer to the adapters and services in Q3. But overall for the year, it's right on.
Okay. And the last one for me and I'll jump back into queue. When I think about operating expenses ramping in 2019, anything out of the ordinary we should be aware of? Or should we expect OpEx growth similar to revenue growth?
We have not formulated our 2019 plan yet. We did have a discussion with the Board just yesterday about our view of kind of the three-year long term trends. And we're in the process of putting a plan together. So I don't want to give any guidance on expenses now for '19. But we're not--I'll just leave it at that for now, and we'll update you later.
I would probably just add to that, we see that during the next quarter--so the activities that we plan to be doing are pretty much a match to our third quarter operating expense levels.
That's for Q4, correct?
Right. So Q4 shouldn't look fundamentally different, and then we'll update you on what 2019 looks like once we put together our plan.
Our next question today comes from Robert Anderson with Penbrook. Please go ahead.
I was wondering if you could speak a little more about the convergence, at least as I see it, of 5G, SentriX, automotive, and the internet of things. It seems to me some pretty significant technological developments are beginning to come together. And for example, for autonomous vehicles to work, I think you really need 5G, given the potential speed and the pervasiveness of 5G. So maybe we could get you to look out a couple of years and try to give us a sense of where this technology is going.
Well, Bob, thanks for the opportunity. Let me maybe paint a picture of what we see happening over the next several years. I think you are absolutely correct that for things like autonomous vehicles to happen, that there are a number of things that need to occur and they all seem to be making progress. Obviously, there needs to be better security solutions, more electronics content in cars we've talked about, more memory content in cars we've talked about. But I think you have also highlighted the need for highly secure, low latency, ubiquitous communications infrastructure.
And--but that's the promise of 5G with cell density, latency, and the ability to handle things like--people call it machine-to-machine communication. It could be car-to-car communication. A whole host of activities around data transmission and transport that get a lot cheaper, a lot lower power, and easier to do with 5G. So we would look at it as one of those things that's certainly helpful to complement the growth that we see in automotive and IoT.
So in the context of that, historically we have talked about Data I/O's industry being roughly a $50 million industry. But this was kind of an older view of the products and the opportunity. It seems to me with all these new products and the promise of 5G in autonomous vehicles and the internet of things, that we're looking at a larger potential revenue for the industry. Could you comment on that looking out several years?
Yes. I would agree with your diagnosis there. The--I touched on it earlier in my prepared remarks. If you look at it for us, for example, let's assume that the microcontroller market is 20 billion units, maybe a little more today. And we think that our installed base is programming several hundred million units. Quick back of the envelope math says that's somewhere between 1% and 2% share of the microcontroller programming market. If the entire microcontroller market pivots to a secure microcontroller market, admittedly that's going to take many years to complete, but you could see how the opportunity for us more near term can become on the order of 10x more than what we're doing today, as an example.
And so, again, even looking at secure microcontrollers, we see that as a very large potential expansion of our served available market.
Our next question today comes from Avi Fisher with Long Cast. Please go ahead.
I have one just numbers question, and then one a little more esoteric. But you have four machines out. Could you talk a little bit about the utilization of those machines? Was there any meaningful addition to the P&L from those machines?
Yes, sure. I think the utilization machines can only be characterized as very low. We're still in the market development phase of SentriX. I think it's more of our customers positioning the SentriX machines so that they can offer fast, reliable service to their customers whether they're in Europe or North America. And at some point, we'll be extending that into Asia. So we're still very early. It did not materially contribute to revenue. But as I said, it's still market development.
And so, I apologize if you've answered the question, but I keep trying to think about analogs to the SentriX. I think about large printer companies that put printers on the floors of both office machines and industrials for label printing, and the customer charge is per unit instead of for the entire machine. And Canon makes a lot of money doing that. Are there any other analogs that you can point us to or that you think about when you think about SentriX that could help guide investors to understand what this could look like in a few years?
I think you've come across a reasonable analogy where people would put capital equipment in and then amortize that on a per use basis. Looking at other models in the industry, the printer one actually is something we have looked at as well. I think what we're trying to do here is a couple of things. It's number one, make it a little easier for customers to adopt the technology early on, because they don't have to pay for a big capital equipment when there's an incubation period. And frankly, we're using the strength of our balance sheet to help grow that market. The second one is ultimately when we do have volume, we're able to get to a point where we can smooth out a little bit some of the peaks and valleys that are associated with our business model today, so that the percentage of recurring revenue that we would have would be higher. Now, it's not going to go to 100%, but it could smooth out those peaks and valleys over time.
And if I could just squeeze in two quick more. Have you bought back any shares yet already?
No. On the program that we just announced today, it was authorized by the Board yesterday. And as you're probably aware, you can't initiate a program like that when you're in the quiet period. We come out of the quiet period well basically after end of this week. So we'll begin the preparations for that quickly. It will likely take a couple of weeks to get all the paperwork done and the process started.
Okay. And finally, Fairchild Semiconductor was selling units that was competitive to you. I think it's called SG. Do you know if that was sold and what multiple that was sold at, at all, if you could disclose?
You are correct. Fairchild was acquired by ON Semiconductor, so actually technically it was ON Semi that was doing the sale. Now to be clear, we talked to them and we know about that and we're under NDA, so I'm a bit limited in what I can say. Although prior to the NDA, we did know about SG. They've sort of been floating in the industry a little bit. Six, seven years ago they were a very formidable competitor and we had gained meaningful share against them over that time period. We looked at it. We did not acquire it, obviously. We do know that it went to a company based in China named Wei and Wei, and that's public information, by the way. And I'll just leave it at that. Our strategy--we really can't comment on what they paid for it because they didn't tell us what they paid for it. But at the end of the day, we're working with SG's former customers, many of whom were surprised by this activity. And some of whom are trying to figure out how to work more with Data I/O, maybe perhaps on adapters and device supports today. And we let them know that if their long term plans are not being satisfied by the new owner, we're here to help.
Our next question today comes from Mike Kaldron with ARC Financial Services. Please go ahead.
ARC Financial likes investing in small microcap companies. We look for growth opportunities. Listening to your call, I understand your business is very cyclical, and I can appreciate the cycles. Do you feel--after reading your 8-K announcement the other day, do you feel that we are reaching the current bottom in the current cycle and starting a new cycle soon? Do you feel that? Are we in the process of that?
That's a really good question. And we don't give out forward-looking guidance on revenue. But I'll tell you how we would evaluate whether we're at the bottom of a cycle and maybe coming up. Because our business is very lump quarter-to-quarter, we like to look at a rolling four quarter average of our indicators, whether that be revenue, bookings, margins, et cetera. Number one, it smooths out the quarterly fluctuations, and number two, it removes all the seasonality by definition. And so, when you look at that, it ends up smoothing out quite a bit the quarter-to-quarter fluctuations.
And if you go back and look over let's say a six or eight-year period, you can find a couple of waves of peaks and values that correspond roughly to about a three-year cycle in our business. If you look at that carefully, you'll find that the cycle peaked last year and, if it follows that type of pattern moving forward, we would expect a bottoming shortly. Now, that's no guarantee of the future, and again, we don't give out future guidance. But those are the types of indicators we look at to evaluate our business.
I can definitely appreciate that. I was just intrigued by the comment that you had made at the event saying that you had picked up--bookings had picked up [indiscernible]. Thought that was an interesting terminology.
Exactly. And we've talked about that as well here, that September was probably our best CapEx month of the year, and October started out extremely well. So--but the--again, those aren't guidance. That's--those are events that have happened, and so we're very happy to tell you about it.
The cycles--I can see the cycles. And each cycle appears to be greater than the previous cycle, and that's very encouraging. Obviously, you're picking up more and more customers. I know you guys are very excited about the new technology, the new platform, and the internet of things. And I know you're deploying more and more, and you're saying that's early stage with that. But what is the feedback that you're getting from the customers? Are they--are the customers that have had the technology implemented--do they feel--what is the feedback that you're getting? I mean, you must be getting some feedback on what you feel those applications will be in the future.
Right. I think that's a good question. The first feedback we get is, first of all, gee, we're really glad you're here because our volumes may not have been supportable by any other mechanism of secure provisioning. The value proposition first and foremost on the SentriX is, because we provision at the chip level, we can manage demand from any customer, any size, including prototyping, all the way through full volume production. Because the SentriX took advantage of a lot of Data I/O's existing handling technology, there--we really had no issues opening it up around could we handle the parts. I think we worked through some of the early growing pains, if you will, of actually doing the first customer supports. They took us a long time just because it was new and our internal tools were being developed at the same time as we were working on those device supports. And the security use cases also that need to be developed were above and beyond the support cases that we associate with our traditional data programming.
But again, as we work through that, our tools are getting much more mature, simpler, and our capacity to do more will continue to go up. So I would characterize it as a classic early stage--early market learning and we continue to get better as we expand and broaden, not only the customer base, but the support for silicon.
Our next question today comes from Dan McLean with Meta. Please go ahead.
My question is about the buyback. I wonder if you could talk a little bit for shareholders about your philosophy. Why a buyback, not a dividend? How does this compete with research and development on the next three-year plan? And do you have a benchmark? Are you only going to buy a certain multiple to book value, for example, or how do you decide when to buyback?
Sure. So I think the first question on a dividend versus a buyback is as you probably know we've done buybacks in the past. We haven't done a dividend, Joel, I don't think since maybe the late '80s.
Late '80s. That was [indiscernible].
There are people that are much smarter than I am on financial engineering that will tell you that if you have excess cash flow, you do a dividend. If you kind of have a lump business that generates maybe some excess cash over a cycle, perhaps a buyback is a better way to go. So we've elected to do the buyback probably based on that criteria.
I tried to highlight this in my prepared remarks earlier. The last time we did the buyback was in early 2016. We just felt at the time that we had confidence in the long term capability of the business. We did not cut back R&D a nickel to support the buyback. And I want to be very clear about that in this call. There is--we're spending somewhere between 20%, 25% in revenue on R&D and we're doing that because we believe that the long term prospects for that R&D are quite good. And to maybe be a little bit crass about it, we do believe we can walk and chew gum at the same time.
So as far as the philosophy, what we'll be buying at, we probably won't talk about any limits or targets we have on the prices that we'll buy at. We'll set that up in consultation with the people that will administer the buyback and we'll just commit to keep you posted quarterly on the amount of shares that we purchase every quarter.
And then, can you--I understand your reluctance to talk about benchmarks. Can you give us some visibility on what this might do to the float? And I'll use an example. Qualcomm, a much bigger chip company, obviously, spent many billions of dollars on buybacks. And if you looked at their float over time, they were basically just keeping even with absorbing equity compensation. And it looks like DAIO has not been able to--I mean, the float is--the shares outstanding keep going up. So do you expect that to reverse any time soon?
Well, if we just do some quick math. Call it $5. $2 million would be roughly 400,000 shares and that's about a couple of years of anticipated equity compensation to calibrate you.
Gentlemen, there are no other participants queued up at this time.
All right, Operator. Well, I'd like to thank you and everyone for attending the call, and I'd like to close the call at this time.
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