庫力索法 (KLIC) 2024 Q3 法說會逐字稿

Greetings and welcome to the Kulicke & Soffa 2024 third-quarter results.

(Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Joe Elgindy, the Director of Investor Relations.

Thank you, Joe. You may begin.

Thank you.

Welcome, everyone, to Kulicke & Soffa’s fiscal third-quarter 2024 conference call.

Fusen Chen, President and Chief Executive Officer; and Lester Wong, Chief Financial Officer are also joining on today’s call.

Non-GAAP financial measures, referenced today, should be considered in addition to, not as a substitute for, or in isolation from, our GAAP financial information.

GAAP to non-GAAP reconciliation tables are included within our latest earnings release, and earnings presentation.

Both are available at investor.kns.com, along with prepared remarks for today’s call.

In addition to historical statements, today's remarks will contain statements relating to future events and our future results.

These statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to risks and uncertainties that may cause our actual results and financial condition to differ materially from the statements made today.

For a complete discussion of the risks associated with Kulicke & Soffa, that could affect our future results and financial condition, please refer to our recent and upcoming SEC filings, specifically our latest Form 10-K, as well as the 8-K filed today.

With that said, I will now turn the call over to Fusen Chen for the business overview.

Please go ahead.

Thank you, Joe. Good afternoon, everyone.

Throughout the past quarters, we continued to execute on several growth initiatives including driving critical progress in advanced packaging and advanced dispense qualifications, enjoying broadening adoption of our new ball bonding solutions, while we also observed ongoing utilization improvement across several of our key end markets.

Before reviewing our quarterly results and performance, I would like to mention a few points on the recent industry momentum within thermo-compression.

There have been three key milestones which we are excited to explain.

First, the formation of, as well as our membership in, the US-Joint semiconductor consortium was announced last month.

Resonac Holdings Corporation, a leading provider of global semiconductor materials, formed this consortium to support industry collaboration and market adoption of new advanced packaging production solutions.

After Joint and Joint 2 were created in Japan, the US-Joint consortium represents the third Joint consortium globally and the first in the United States.

A combination of ten leading equipment, materials, and process companies based in the US and Japan represent the US-Joint’s forming members, who have the near-term goal to establish a US-based R&D facility with advanced packaging capabilities.

Construction for the US-based R&D facility will begin in the current calendar year, and at completion, will provide access for critical industry-leading-advanced packaging technologies, materials, and processes, which are not readily available locally to many of our US-based customers.

Our second TCB milestone is associated with a collaboration with the subsidiary of a large semiconductor conglomerate who has successfully demonstrated our leading Fluxless thermo-compression or FTC system, which is capable of direct copper-to-copper bonding as a standard feature, can also enable an exciting new chip-to-wafer hybrid bonding process.

Hybrid bonding involves making both conductive and dielectric bonds, providing specific benefits for select end markets.

With a lower requirement for capital-intensive front-end investments relative to existing chip-to-wafer hybrid solutions, we expect this bumpless-FTC process to further expand our long-term chiplet and heterogeneous opportunities.

As explained by industry headlines, there are many hybrid bonding processes including wafer-to-wafer as well as chip-to-wafer.

This innovative TCB-enabled hybrid solution targets chip-to-wafer applications for deployment in high-volume consumer and compute markets, by offering a lower capital-intensive path to hybrid-based chiplet assembly.

At a higher-level, adopting chiplet-based packages can reduce product development times, allow for amortizing design costs over broader end markets, and is critically important in extending Moore’s law.

With that said, our existing FTC system, which can bond copper-to-copper interconnects as a standard feature, can provide a more direct pathway to chiplet-based production for many customers.

Those seeking a chip-to-wafer hybrid option now have an additional alternative.

As the industry accelerates the adoption of thermo-compression, we continue to enjoy growing commercial success and broadening market access through our intimate and expanding customer engagements.

Over the past four years, on a trailing basis, our TCB business has grown by 10 times, and we are still in the early stages.

This was accomplished through new access to silicon photonics, 3D sensing and leading-edge markets, including our first-mover position in Fluxless TCB at a leading IDM customer.

We have continued to drive industry adoption and have announced several wins in the assembly and test space earlier today, highlighting this rapidly growing opportunity.

Also, we continue to make progress in our foundry engagements and remain very optimistic we can unlock an additional leading-edge customer over the near term.

Similar to our initial IDM customer engagement, which began in 2020, new-technology wins with leading customers requires a lengthy and collaborative engagement process and significant patience.

These recent wins and evaluation progress, help solidify our TCB process as a long-term solution to support the growing adoption of chiplet-based architectures.

While there are several different technologies and processes to support the diverse needs of the future chiplet market, we are well prepared to support the industry with our leading solutions.

We are clearly excited as we are securing positions in new markets supporting AI, HPC, and mobility – which have historically not included from our served markets.

These wins provide confidence in our leadership, as well as the long-term potential for Fluxless adoption.

Due to thermo-compression adaptability, out-of-box copper-to-copper capability, and broader customer set, it provides lower barriers to entry for mass-market chiplet adoption.

Thermo-compression remains an emerging technology with a long-technology life ahead to support these growing market needs.

Different interconnect technologies can be challenging for analysts and investors to forecast, although I would like to remind investors to not overly focus on one specific interconnect technology.

There are many packaging transitions across our end markets with a growing number of tradeoffs, largely between cost and performance, but also production capability and system-level requirements.

It’s critically important to recognize that the high-volume, cost-sensitive portions of the semiconductor assembly market will also need stacked-die solutions over the long term.

These varying market needs are becoming more evident every quarter, as we are actively developing several multi-die and stacked-die solutions which are being evaluated across our customer base.

Many of these higher-volume opportunities will likely demand more cost-effective processes, such as vertical wire, and remain independent from many of today’s TCB and hybrid-focused markets.

From our humble wire-bonding roots, we are pleased with our new market footing and access we have demonstrated.

Recent customer adoption combined with ongoing innovations provides a strong foundation to support long-term advanced packaging adoption.

I am very proud of our team for developing and driving the recent customer success across our portfolio.

Turning to the June quarter business results, we were able to achieve our guidance midpoint while generating slightly more non-GAAP EPS than anticipated, due to our operational focus.

At a high level, we expect most of our end markets have already experienced trough levels of demand over the past 18 months.

Over this time, certain markets began showing signs of improvement, while other markets faced headwinds that restricted our corporate-level performance.

For example, our ball bonding revenue, on a year-to-date basis, has improved by 42 %.

Despite this relatively meaningful level of improvement, we also experienced offsets due to well-known automotive and industrial headwinds, which reduced wedge demand earlier this year.

At this point, we are pleased to begin seeing signs that multiple end-markets are improving gradually, although in better coordination, and we remain optimistic.

While the market environment has become more positive, we expect our high-volume solutions are still well below the normal demand levels we would consider sustainable for the broader industry.

Our core ball and wedge businesses have room to grow.

Looking at our end markets more specifically, we continued to see utilization improvements in general semiconductor; pockets of demand improvements in LED, automotive, and industrial; resilience in APS; and ongoing recovery in memory.

Within general semiconductor, utilization rates for ball bonding have continued to improve sequentially, although have not yet reached the critical tipping point expected to drive high-volume customers to broadly require capacity additions.

Recent order activity has centered around high-volume regions where utilization rates have averaged over 80% for the past two quarters.

At the same time, the rest of the world has lagged slightly but is continuing to improve.

As expected, global ball bonder utilization rates have exceeded 75% last quarter and are anticipated to be in the high-70% range during our fourth fiscal quarter.

Looking out into fiscal 2025, we continue to anticipate semiconductor unit growth expectations will support an additional step-up in demand for our high-volume solutions.

We also anticipate ongoing industry growth will continue into calendar 2025, based on market forecasts, but also due to ongoing global front-end related investments.

In addition to the improving general semiconductor dynamics, we also booked approximately $20 million in thermo-compression revenue during the June quarter, which included our recognition of an additional FTC system which supported the recent TCB-enabled hybrid development milestone.

Within Automotive and Industrial, we have also seen improvements in demand as our interconnect leadership position is actively supporting emerging processes utilized in efficient power storage, power delivery, and power control for electric vehicles, charging infrastructure, industrial applications, and sustainable energy generation.

We continue to see many innovations effecting power-semiconductor assembly which are driving the need for more robust interconnect technologies such as our recent high-power interconnect, or HPI solution within wedge bonding.

HPI is being deployed in high-volume battery production as well as for more efficient power conversion required for charging and sustainable energy applications.

We remain directly involved with several global EV manufacturers, the broader power semiconductor technology transitions, as well as leaders in the dynamic battery market.

Of note this quarter, we continue to support an exciting dispense opportunity recently deployed with a leading solid-state battery company.

While sub-markets of automotive and industrial may still be digesting capacity, we expect ongoing improvement to continue throughout fiscal 2025.

Within memory, we see customers investing in new capacity and technology which is supporting the NAND market and gaining support for new stacked-die solutions in the large and established LPDDR market.

While NAND is arguably the largest stacked-die market in the semiconductor market, relying nearly exclusively on wire-bonding technology, we expect high-volume DRAM to transition to 3D packaging formats over the coming years.

Several important leaders in the memory market are expected to accelerate development and pre-production activities over the coming quarters, with higher-volume production to begin in late calendar 2025 or early 2026.

Similar to the growing leading-edge and high-volume assembly needs for chiplet-based architectures, the memory market continues to seek out new ways to leverage packaging technology to drive greater transistor-density-per-area.

Our thermo-compression and vertical wire solutions are anticipated to more effectively meet the mass market’s performance, manufacturability, and cost requirements verse emerging technologies such as chip-level hybrid bonding that can be prohibitively expensive due to the requirement for front-end capabilities as well as well-known yield challenges.

We remain in a very unique industry position as evident in our leadership enabling critical technology transitions such as direct copper-to-copper and Fluxless adoption for leading-edge applications, high-power interconnect solutions for automotive and industrial applications, and vertical-wire solutions for high-volume consumer-oriented markets.

These emerging solutions supplement our existing broad portfolio of interconnect solutions.

We are well positioned to support customers’ needs while delivering significant long-term value to investors.

In closing, after nearly two years of capacity digestion, we are pleased to continue seeing gradual signs of broader-based cyclical recovery across multiple end markets.

Gartner recently projected a 17% semiconductor revenue industry growth rate through calendar year 2025.

This growth expectation seems very reasonable considering ongoing global front-end investments and is expected to be led primarily by AI, automotive, and general semiconductor, which we expect will directly benefit the company and its investors.

Global utilization rates which are moving to the high-70% range, also increases confidence for a more robust 2025 recovery.

I will now turn the call over to Lester for the financial review update.

Thank you, Fusen.

My remarks today will refer to GAAP results, unless noted.

While there continues to be headwinds across specific end markets, it remains a transformative time for the company.

As Fusen mentioned, multiple end-markets are showing signs of improvement represented in utilization rates as well as growth expectations into next year, while momentum in our portfolio of advanced packaging solutions is accelerating through both our direct customer qualifications and broadening industry adoption.

During the June quarter, we generated $181.7 million of revenue and a 46.6% gross margin.

Gross margins were largely affected by product and customer mix.

Operating expenses came in slightly lower than expected as we have maintained a significant focus on operational efficiency as our development teams remain nimble and were efficiently re-allocated to support in-demand projects over the past quarter.

GAAP tax expenses came in at $4.1 million during the June Quarter.

We continue to anticipate an effective tax rate above 20% through the remainder of fiscal year 2024, largely related to our R&D tax treatment under Section 174.

Our repurchase program remains opportunistic, and we have again increased our repurchase activity sequentially.

During the June quarter we booked $44 million of open market repurchase activity, which represents a sequential increase of nearly 18%, and a 64% increase over the previous December quarter.

As a reference point, we repurchased $728.5 million through both open market and accelerated repurchase activity under the existing repurchase program since August of 2017.

At the end of the June Quarter, we had approximately $73 million remaining on this existing share repurchase authorization.

In addition to the long-term nature of our share repurchase program, we continue to support an industry leading dividend program as we continue to execute on new long-term growth opportunities.

As Fusen clearly explained, we remain very optimistic in a broader multi-market recovery over the coming quarters.

Although we may not be at the tipping point yet, we anticipate meaningful capacity demand improvements for our high-volume markets over the near-term.

For the September quarter, we expect revenue of approximately $180 million , plus or minus $10 million with gross margins of 47%.

Non-GAAP operating expenses are anticipated to be $69 million , plus or minus 2%.

Collectively, for the September quarter, we expect GAAP EPS of $0.22 per share and non-GAAP EPS of $0.35 per share.

Looking ahead, we remain very focused on our close customer engagements and look forward to providing additional details to the technology transitions we are involved in that are supporting new technology and adoption milestones which will help to build a foundation in memory, dispense, and thermo-compression growth prospects over the coming years.

This concludes our prepared comments.

Operator, please open the call for questions.

(Operator Instructions) Craig Ellis, B. Riley Securities.

Yeah, thanks for taking the question.

And Fusen, thank you for all the help with the new product information.

I wanted to inquire on a near-term item first and look a little bit beyond the September quarter.

So as you look at the gives and takes for the fiscal first quarter with the broad-based or coordinated -- I guess, coordinated recovery, you talked about, Fusen.

How do you think about the impact what you're seeing with improving end markets or portions of end markets versus just relatively low utilization levels in most of industry?

Thank you.

So Craig, you are asking about Q4 FY24?

Calendar 4Q, yeah.

Okay.

So last quarter, I think we expect a gradual recovery with a slightly improvement into September.

Our low [utilization] rate went up but are still not high enough to trigger broader recovery.

So at this moment, actually, I think we are seeing Q4 actually flat compared to Q3.

That's helpful.

And then as you look out further, Fusen, and this is more of a question about what your customers are telling you and how they're telling you to get the business ready for -- what should be some seasonal acceleration in the business?

Can you just talk about how you envision the slope of recovery playing out?

It seems like we've got very uneven demand dynamics across end markets.

Indeed, some are recovering seem to be still trying to find a bottom like industrial.

What does that mean for how the business might perform as we think about calendar 1Q through 3Q next year?

Okay.

So Craig, you see, past about six quarters, our revenue basically is quite flat.

And -- but at each movement, it's our feeling.

This is a first half positive quarter.

We see multiple end markets improvement in coordination.

For example, I think early '23, the (inaudible) on the equity, in our opinion, not a lot.

In the meantime, the wedge bonder, which was impacted by industrial and also auto.

So that's why I think we actually almost have a cost activity six months of quite flat.

But what we are seeing from our feedback, we see auto will be coming back.

We -- the Q3, Q4.

We also did a quite with our order uptick in our EV company for the wedge bonders and memory is also picking up.

So if you are asking about '25, I think many people have an optimistic view about '25.

With the Gartner predicted 75%, these will actually trigger broader recovery in our many end market.

So you asked about seasonality, this is our view.

We probably can see growth into the Q1 because of our utilization rate is inching up close to 80%, but also I think it's not impossible if we see flat to slightly minor shift from negative over Q1 and Q2, which are stronger recovery in the -- our Q3, Q4 '25.

Hope I answered your questions.

Krish Sankar, TD Cowen.

Yeah, hi.

Thanks for taking my question.

I had a few of them.

First, Fusen, a clarification.

When you said December quarter flat versus September, was it for revenues or utilization rate?

Actually, because we also guide in $180 million for Q4, right, and actually, Q3, we just finish with $181 million.

So I mean flat is the revenue.

By utilization, we are actually seeing continue to inching up some areas already over 80% for the quarter.

And (inaudible) right now, I think, is 75%.

We do expect in Q4 we'll go to higher 70%, but still not touch 80% yet.

So that's why I answer, if asked seasonality, it's hard to gauge.

Because of our recovery expected by Gartner, we will have a chance maybe to go up in Q1, but it's also not impossible we see flat or also -- or actually, many, many minor (inaudible) supported by our second half based on a recovery.

Got it.

Got it.

And then just on that point, Fusen, historically, OSAT had an appetite to add capacity and utilization rate is about 90% given the lead times were not that long.

So is that a fair assumption in that case, maybe the recovery is truly later sometime next year till we get to 90%?

Or do you think there’s an appetite to add capacity even below 90%?

Well, I think it's 80% trigger additional buy.

Actually, we do see OSAT start to contributing.

We actually start from our Q3 and Q4 also for China.

We also have memory OSAT, also start to have a buy.

So we feel OSAT easily in that capacity now.

Got it.

Got it.

And then two quick questions on advanced packaging.

One is, can you talk a little bit about the status of the TCB qual on the Taiwan foundry?

What is going on there?

Okay.

So Krish, I think we actually have engagement and qualification.

Actually have multiple projects over there.

And this [price] is we believe, is going to be a growth for us in the future.

The qualification is a full Fluxless.

And this is for the high-end products, and it's Fluxless.

And for the Fluxless, we are the only ones in the mass production in the full industry.

And qualification actually takes a long time.

The previous IDM company, we took across to two years to finish it.

So far in our opinion, we believe all of these come out positive and we have early -- the production for the first customer is intended for first half of '25.

We feel positive and we have initial discussions about capacity and also delivery schedule at the early stage.

So we expect to reach new -- near the milestone and we will be able to update you on maybe in our December call or November call.

Got it.

And then final question, I think in the last time, Fusen, you mentioned FY25 advanced packaging, dedicated AP revenue could be $200 million.

Are you still sticking with that number or do you think it might be lower than that?

Chris, could you repeat?

I think last quarter, you said in fiscal '25, advanced packaging revenues could be $200 million dedicated AP.

Is that still the case?

So this is our forecast.

Our TCB alone in '25, last quarter, we forecast about $100 million.

But for dedicated advanced packaging, this including TCB, also including of vertical wire, and also including our system in packaging.

So all in together, we're close to $200 million.

And since (inaudible) more engagement in our site.

We are doing a long-term forecast at this moment.

We probably will be able to choose you in the next couple of quarters.

Tom Diffely, D.A. Davidson.

Yeah.

Good afternoon.

Appreciate the question.

When I look at the guidance for flat next quarter at $180 million, is there any kind of shift between end markets or products or is it going to be fairly similar to what you had this quarter?

It actually is quite similar compared to Q3.

Okay.

And then, Fusen, when you looked at the slides you produced and you gave a five-year average for the different segments.

When you look over the next five years, do you think that those are pretty good numbers or do you think some of those markets were overstated with the big upturn or understated because of growth drivers?

Tom, are you talking about which number, can you

(multiple speakers)

Yeah.

On your slides, you had a five-year average for the different segments.

And I was wondering if those five-year segment -- the five-year averages are good on a go-forward basis or do you think they are over or understated for the next five years?

So Tom, it's Lester.

So we believe that -- those numbers are good going forward on a five-year basis.

As a projection going forward, there might even be a little bit of an upside going forward.

Okay.

Great.

And then finally, Lester, when you look at the Project W that was canceled last quarter, what was the cost associated with that?

And have those expenses or costs been reallocated?

So I think for Project W, there's minimal costs associated with in Q3 and in Q4 going forward.

And we have reallocated those resources.

I think in my remarks, I mentioned that we kept OpEx down because we reallocated those resources in an efficient manner to project that is -- that was more in demand for the quarter and going forward.

Dave Duley, Steelhead Securities.

Thanks for taking my questions.

A couple.

Let’s start on advanced packaging.

I was wondering if you could just help us understand the applications that you have thus far kind of captured in order to produce this 10x growth in your thermocompression bonding.

And just digging into that puzzle just a little bit further, I think we all recollect your first customer here was a big IDM CPU provider.

If you could kind of just help us understand at that big customer, what -- are you doing chip-on-wafer or chip-on-substrate?

And how does that help you win business at the big foundry?

So Dave, I think we start to get a more significant revenue in '21.

So it's about less than $10 million.

So within four years, I think, first, we start with OSAT.

After OSAT, we are working with IDM company and we developed actually a chip-to-substrate.

And in the meantime, I think, when we worked with OSAT, we also are working with the customers who focus on silicon photonics and also like 3D sensing.

So right now, I think we have a special market, silicon photonics, silicon sensing, and also have actually more important heterogeneous integration.

So I think last year, we (inaudible) was $76 million to $80 million.

So we actually start to focus.

We believe in the features.

They are few big areas for us.

One is the OSAT.

We actually feel very comfortable.

We continue to get more revenue and more application over there.

And number two is a chip-to-substrate.

I think we are doing very well.

What we are focusing right now actually is going to be a chip-to-wafer.

We believe this is a huge market as well as foundry player.

So with these two areas, I think we probably fuel our growth for the next couple years.

And does the outsourcing part of the [co-los] process to the OSAT?

And I think that's the OS part, the chip on substrates, is that a beneficial trend for you guys -- given that you already have relationships with these OSATs and they're using your equipment?

Or do you have to go in and kind of prove yourself completely new there?

It is beneficial to us.

I'm sorry.

I didn't hear that.

It's beneficial to us.

Okay.

Final question from me is just on the core business.

A couple of years ago, it was obviously running at much, much higher levels.

And I am just kind of curious, is there any reason that you can see that, that core business wouldn’t achieve peak levels of revenue again like it was a few years ago, given the appropriate circumstances in the end markets?

Well, so David, you are asking about the core business, right?

So actually the year 2022, 2021, I think we basically went up from like (inaudible) to about 1.5. This is 2.6 growth, 2.6x. That's very, very significant.

So that's why I think our '21, '22, 1.5. Actually a lot of customer, they overbuy, a lot of our core business buy.

Therefore, I think we are down to this level.

But if you look at it, even Gartner prediction is correct.

The 17% unit growth, just assume half of that is a, say AI related or whatever.

Even at 8%, right, we'll achieve largely of our capacity by -- for our core business.

I give you a EBITDA of normal ball bonder business.

Even before COVID, it's about $500 million to $600 million.

So we trigger capacity by -- I think you can calculate.

We are still -- this year's year less than $400 million for ball bonder.

So we believe we have a huge opportunity in core business.

Also our new technology and the value for the future in ball bonder including VFO and also in wedge bonder of HPI.

So we do believe semiconductor downturn normally no more than a six quarter.

We already have eight quarter.

Including this quarter, maybe nine quarter.

So longer downtime, actually, we believe. (inaudible) somewhere I believe stronger and a strong

(inaudible)

Yeah.

The longer you stay under the curve, the bigger you will be over the part -- out of the part of the curve when the things get better, right?

Everything kind of evens out that way.

Okay.

Thank you.

Ross Cole, Needham & Company.

Hi.

Thank you for taking my question.

I noticed that you mentioned you expect the December quarter to be flat compared to the September quarter.

And you are expecting gross margin to remain roughly the same area for the two quarters as well?

Thank you.

So actually, I think maybe that was a high -- it's Lester.

I don't think we guide into the December quarter.

I think what Fusen said was actually the September quarter, which we just guided to, is flat to the third quarter.

He did mention for the December quarter, which now first fiscal quarter for '25.

There is some uptakes, but there may also be some seasonality in there.

So I think right now it's per se.

As far as gross margin is concerned, yeah, I think we believe that gross margin will probably stay around the 47% level through the rest of the calendar year.

But then we'll pick up in the calendar year '25 as some of our cost reduction initiatives kicked in as well with some of our newer products, which certainly get traction, but we'll have a lot more traction in '25.

And those are much higher-margin products.

So we still are aiming towards a 50% gross margin on a corporate-wide basis.

Christian Schwab, Craig-Hallum Capital Group.

Great.

Just, Fusen, other than Gartner enthusiasm for revenue growth, your semiconductor unit growth, is any of your dialogue with any of your customers suggesting that the first half of calendar ‘25 that they plan on giving you a bunch of orders?

I think that everybody we talk, optimistic over '25 because Gartner has been very long.

Actually, in the short term, we have been in this chart for six to eight quarter already.

If you look at it the-energy- and historically, we don't see it this.

That means that our market is stabilized.

And in the future, we have a new product to offer.

But short term, I think it is really hard to judge.

In the meantime, the utilization rate is inching to 80%, right?

75%, we do believe -- finish Q4 would be a high-78%, and that's why it's given trigger capacity wise.

Maybe customers here have little budget concern and the macro all is -- so if you're asking me about our Q1 and Q2, it can go up, but it can also be flat.

Also seasonality, we don't expect a major one.

But actually, we are quite bullish so as many customers we talk to '25, you know, will be a good year.

And then just further clarity, what type of applications or end markets are people most excited about a recovery in ‘25 then, automotive, industrial, et cetera?

Okay.

I can tell you.

Of course, we look at our advanced packaging and we also look at the wedge bonder, a lot of auto, industrial, and mainly is ball bonder, right?

So ball bonder actually, the customer is in general semi and is also auto and also in AI.

So I think the application is quite broad and I mentioned the average normal year of a ball bonder should be 500 to 600, right, even before COVID and we have been in a prolonged downturn.

And we do believe a little bit of a broader recovery.

I think we probably will be the first one to see that recovery.

Thank you.

There are no further questions at this time.

I'd like to turn the floor back over to Joe for closing comments.

Thank you, Alicia, and thank you all for joining today's call.

Over the coming quarter, we'll be presenting at several conferences or roadshows.

As always, please feel free to follow-up directly with any additional questions.

This concludes today's call.

Have a great day, everyone.