Nova Ltd (NVMI) 2018 Q4 法說會逐字稿

Good day, and welcome to the Nova Measuring Instruments Ltd.

Fourth Quarter 2018 Results Conference Call.

Today's conference is being recorded.

At this time, I'd like to turn the conference over to Miri Segal of MS-IR.

Please go ahead.

Thank you, operator, and good day to everybody.

I would like to welcome all of you to Nova's Fourth Quarter and Full Year 2018 Financial Results Conference Call.

With us on the line today are Mr. Eitan Oppenhaim, President and CEO; and Mr. Dror David, CFO.

Before we begin, may I remind our listeners that certain information provided on this call may contain forward-looking statements.

And the safe harbor statement outlined in today's earnings release also pertains to this call.

If you have not received a copy of the release, please view it in the Investor Relations section of the company's website.

Eitan will begin the call with a business update, followed by Dror with an overview of the financials.

We will then open the call for the question-and-answer session.

I'll now hand over the call to Mr. Eitan Oppenhaim, Nova's President and CEO.

Eitan, please go ahead.

Thank you, Miri, and thank you all for joining our fourth quarter and full year 2018 financial results conference call.

I will start the call today by speaking briefly to our fourth quarter results.

I will then spend some time summarizing 2018 performance highlights and conclude my part with the guidance for the first quarter of 2019.

Following my commentary, Dror will review the quarterly and full year financial results in details.

Nova reported strong results for the fourth quarter with revenues reaching the high end of the guidance and record profitability which exceeded the guidance range.

These achievements are further evidence of our steady progress along the year to widen the company's exposure to all semiconductor front-end segments in all territories.

We are very encouraged by this progress that is fundamentally increasing Nova's resilience and support us in the current volatile environment entering 2019.

Our solid performance this quarter is supported by our diversified customer mix, which yielded 4 large customers, including the world's largest foundry and the 3 leading memory providers.

As a result, Memory and Foundry contributed evenly to our overall product revenue in the quarter.

Our financial results for the quarter were an excellent conclusion to a sixth consecutive record year, highlighting the strength of our unique product offering, our diversified customer base, our operational excellence and our position as the leading metrology innovator.

Following the fourth quarter results, 2018 turned out to be an outstanding year for Nova with record financial performance, demonstrating the transformation we went through to establish Nova as a multi-technology and product company for all semiconductor front-end segments.

Our consistent performance through 2018, which reflects compound annual growth of 18%, has resonated with our customers as we have been able to meet the growing demand for advanced metrology in a very challenging wafer fabrication environment.

Overall, our market position exiting 2018 is significantly better than ever before and is driven by 4 main achievements that assist the company to better handle market volatility.

The first, which deserves special emphasis, is the annual revenue mix that balances the company exposure to all front-end semiconductor parts, with Foundry and Memory contributing 50% each to the product revenues.

Through 2018, and in order to meet our annual growth targets, we had to accelerate our penetration efforts to key Memory accounts and succeeded to increase Memory revenues by 60%, setting record levels and significantly outpacing the memory market growth rates.

This achievement is also highlighted by our annual customer mix that included 4 large customers, including 2 leading memory providers and 2 large foundries.

This is driven by the significant inroads we have made to strengthen our competitive position with all Memory customers while keeping our leading position in Foundry.

The growing balance in our customer base and the increased exposure we have to more opportunities supported our performance in the second half of 2018, where we mitigated Memory pushouts with growing Logic demand in the most advanced 7- and 5-nanometer nodes.

As a result, all of Nova's dimensional and materials metrology tools have been selected as tool of record in the most advanced N5 logic sites.

This achievement is mostly reflected in our Q4 results with growing contribution from TSMC.

The second achievement to elaborate on is the territory mix, where our exposure was widened to include 3 main territories, Taiwan, Korea and China, contributing more than 20% each to our product revenues in 2018.

The third item to mention is the growing contribution from our service sales.

The strength in our service business generated a new yearly record, which reflects 21% growth year-over-year.

Our continuous investment in enhancing our install base is bearing fruit with various solutions that enable enhanced productivity, better utilization and improved metrology in previous models.

We expect to see continuous growth in the service business in the coming years as well, while our install base is growing and our upgrade packages are evolving.

The fourth pillar to highlight is our aggressive plan to innovate a unique product strategy that is based on our differentiated optical and X-ray technologies for both dimensional and materials process control.

This diversified offering proved itself beneficial this year with few customer wins, demonstrating clearly the competitive edge in a wider measurement capability.

As a result of our unique approach, a growing portion of our product revenue generated today is based on solutions that only Nova can provide.

As we shared in our previous earning calls, we increased our investment in R&D during the year in order to further develop organic growth engines.

In addition to the 3 new generation dimensional and materials metrology hardware models we launched at the beginning of the year, we also introduced a unique breakthrough machine learning software suite in 2018 to complement the traditional physical modeling software engines that have been used in the industry for many years.

The new Nova Fleet software significantly enhances our metrology capabilities and provides adaptive metrology solutions.

The ability to combine hardware and software into one solution is already bearing fruit, with more than 10% of our dimensional metrology revenues generated by this unique offering.

Additionally, we are very encouraged by the progress we have made with the 2 new technologies we have developed for advanced metrology applications.

As detailed previously and according to our plans, both technologies were rolled out to the market recently.

These 2 new approaches to metrology techniques were shipped to 2 customers for evaluation.

We expect this assessment to be completed during the year.

Finally, as part of our product strategy entering 2019, we see a strong shift into materials metrology where more complex measurements are needed.

Composition, stress, strain and other measurements have evolved to be major parameters to control all device types.

Because of this trend, we believe that the materials engineering overall market will grow significantly in the coming years and will support our materials metrology growth engines.

Finally, and in order to conclude the year's results, we are very pleased with our record annual profit, which demonstrates, once again, the value our offering brings to our customers and our shareholders in the operational efficiency we embedded into our business model.

Our confidence in Nova's long-term growth opportunity, notwithstanding the current market challenges, led us to establish a $25 million share repurchase program.

Our prospects for continued growth in the long term are still positive and give us the confidence in our plans, which supports enhancing our shareholders' value.

In order to conclude my prepared remarks, I would like to briefly highlight the market dynamics as we see them currently.

In terms of the present demand, we are aligned with the consensus expectation for a soft 2019.

In our view, the spending environment is largely influenced by a decline in memory spending in both DRAM and NAND.

Nevertheless, we expect growing Foundry and Logic investments in the new logic and foundry nodes of 7- and 5-nanometer.

We believe, as do many other semiconductor companies, that although we should expect a year of slower memory digestion in 2019, the long-term growth opportunity for the industry remains solid, fueled by more high-end applications that require better computation power and memory capabilities.

We expect that the current soft mobile and data center demand will be better optimized along the year.

Low visibility in the industry today is challenging, particularly in Memory.

Our current view is that the second half of 2019 may generate market upside with a possible rebound in Memory and N5 Phase 2 early rollout towards the end of the year.

I would like to emphasize that this is based on our internal current assumptions only.

As for Nova, although we are not immune to the market volatility and current low visibility, we expect that given our innovative leadership by a new product rollout and our balanced exposure to grow the opportunity range, we are positioned to do better than the industry in 2019.

As for the first quarter of 2019 guidance, we expect revenues in the range of $52 million to $58 million; diluted EPS on a GAAP basis in the range of $0.15 to $0.26 per share; and non-GAAP basis diluted EPS in the range of $0.24 to $0.34 per share.

Now let me hand over the call to Dror to review our financial results in details.

Dror?

Thanks, Eitan.

Good day, everyone.

In my following prepared remarks, I will refer to both GAAP and non-GAAP results.

You can find a detailed reconciliation per item at the end of the earnings press release.

Total revenues in the fourth quarter of 2018 were $63.1 million, at the high end of the company quarterly guidance.

Of the company's product revenues, 55% came from Memory, a record quarterly level in percent and in dollar terms, and 45% came from Foundry.

On the customer distribution front, TSMC, Samsung, Hynix and Micron were the largest contributors to the company products revenue in the fourth quarter.

This customer list includes the world's leading foundry and the 3 largest memory providers, which emphasizes the company-wide and balanced exposure to the overall semiconductor front-end market.

We believe that this balanced exposure across customers and segments was a main catalizator for the ability of the company to produce record level quarterly results amid challenging market conditions.

Blended gross margin in the fourth quarter was approximately 57%, within the company target model of 56% to 59%.

Product gross margin came in at 63%, while services gross margin decreased to 38%, mainly as a result of year-end adjustments.

Operating expenses in the quarter totaled approximately $21 million on a GAAP basis and $19 million on a non-GAAP basis, lower than the previous quarter.

The decrease in operating expenses resulted mainly from incremental R&D income of approximately $2 million, which was received at the last week of the calendar year and was recognized on a cash basis.

Recently, the company was able to complete the transition of its local Israeli government's funding for its so-called generic R&D program, which does not bear royalty.

Looking forward in 2019, we expect R&D income to fluctuate on a quarterly basis as it depends on the timing of payments and approvals to be received from government authorities.

Operating margin in the quarter was 24% on a GAAP basis and 27% on a non-GAAP basis.

The effective tax rate of the company in the quarter was approximately 7%, significantly lower than previous quarters, mainly as a result of the catch-up of tax credits related to the new tax legislation benefits in the U.S.

Earnings per share in the quarter were at an all-time record, with GAAP EPS at $0.53 per diluted share and non-GAAP EPS at $0.59 per diluted share.

This is significantly higher than the company guidance for the fourth quarter, resulting mainly from higher R&D income and lower effective tax rates in the quarter.

On an annual basis, the company reported record revenues of $251 million, 13% increase over 2017, reflecting a sixth consecutive revenue growth year.

Product revenues increased by 11% year-over-year and included a balanced distribution between Memory and Foundry, each contributing 50% to product revenues.

As Eitan mentioned, Memory revenues grew by approximately 60% in 2018, significantly higher than the overall memory CapEx growth rate.

The largest customers which contributed to 2018 annual product revenues were TSMC, Huali, Samsung, Hynix and Micron.

In 2018, service revenues increased by 20% year-over-year.

This increase was driven by expanded install base as well as by specific fab-wide upgrade projects.

Blended gross margin on an annual basis came in at approximately 58%, within the company target model of 56% to 59%.

Operating expenses in 2018 increased by approximately 15%, mainly in research and development and sales and marketing as the company continued to invest in new technologies and product offerings and further expanded its customer-facing teams.

Operating margins in 2018 were 24% on a GAAP basis and 27% on a non-GAAP basis, within the company target model of 26% to 29%.

Annual effective tax rate was 14%, lower than the previous year, mainly as a result of the impact of the new U.S. tax legislation.

Earnings per share in 2018 was at an all-time record, with GAAP EPS at $1.89 per diluted share and non-GAAP EPS at $2.11 per diluted share.

During 2018, the company generated operating cash flow of approximately $36 million and invested approximately $4 million in capital expenditures.

Regarding the company outlook for the first quarter of 2019, at the midpoint of the company guidance, we expect the following: blended gross margin is expected to be approximately 55%.

This is lower than the average due to a less favorable product mix in the quarter, coupled with the introduction of new product models, which bear higher cost at their initial product penetration phase.

Operating expenses are expected to be approximately $23 million on a GAAP basis and approximately $21 million on a non-GAAP basis.

Effective tax rate in the first quarter is expected to be approximately 15%.

With regard to 2019 as a whole, our expectations at this point in time are as following: during 2019, the company will transition its main offices in Israel and the U.S. to new locations.

This transition is expected to conclude during the year.

As a result, capital investments are expected to increase to approximately $20 million in 2019 and then return to normalized levels.

In addition, the company is expected to bear some duplicate office lease costs during some of the office transition period.

The company plans to adjust these duplicate office lease costs for non-GAAP representation purposes.

On an annual basis, for 2019, we expect blended gross margin to be within the range of the company target model of 56% to 59%.

On the tax front, we expect the effective tax rate to be approximately 15% across the year.

In addition, starting January 1, 2019, the company is required to implement the new lease accounting rule known as ASC 842.

This rule requires the company to present operating leases which extend for a period of more than 1 year as an asset and liability in its balance sheet.

As a result of this accounting implementation, the company is expected to record an amount of approximately $25 million as assets and liabilities on January 1, 2019.

The majority of these lease liabilities are denominated in new Israeli shekels and are linked to the Consumer Price Index in Israel.

Therefore, they are exposed to exchange rate fluctuations on the full amount of the liability on a fluent basis.

The company plans to adjust the implication of these exchange rate and linkage differences for non-GAAP representation purposes.

I will conclude with the company's cash reserves, which increased to approximately $170 million at the end of 2019 -- 2018.

This cash level will enable the company to continue to pursue new business opportunities as part of the company's strategic plan.

With that, I will turn the call back to Eitan.

Thank you, Dror.

With that, we will be pleased to take your questions.

Operator?

(Operator Instructions) And we'll take our first question from Jaeson Schmidt with Lake Street Capital Markets.

I know you kind of outlined some dynamics within Foundry and Memory this year.

But if we take a step back and look at sort of the big picture, what do you think your product mix will be for 2019 between those 2?

So, Jaeson, we don't guide beyond the quarter, but I assume that based on the recovery in TSMC and the spending in 5-nanometer, that it will weight back into the Foundry, not significantly, but I assume that Foundry this year will be larger.

Okay.

That's helpful.

And what percent of the product revenue in Q4 was related to trailing nodes?

I think you can assume around 50% of the revenues are related to our trailing nodes.

Between 40% and 50%.

Okay.

And last one for me and I'll jump back into queue.

I know previously, you have talked about the service revenue line being able to grow around 10% annually.

Given the current macro backdrop, has that significantly changed at all?

No, we don't think so.

The install base of the company in general is growing 10% a year, which means we have more opportunities, more or less at that rate.

So we do expect 10% annual growth in services looking forward.

(Operator Instructions) We'll take our next question from Patrick Ho with Stifel.

Eitan, maybe first off on your services business.

You displayed above-average growth in that segment in 2018 and you're looking for another year of growth.

The margin profile also continues to improve in that business segment.

Can you discuss some of the, I guess, business changes?

And how you're, I guess, enhancing that business segment to contribute to the overall gross margin profile of the company?

Yes.

So basically, we are very encouraged from the growth that -- within the last few years.

As you said, it's a consistent performance to increase those businesses.

I think that because of the amount of integrated metrology that we ship on a yearly basis, the install base is growing tremendously.

And proactively, what we do on the install base is coming with few packages.

The first one, of course, is productivity all the time.

So customers that want to utilize our tools better usually ask to enhance productivity, and that is what we do.

Secondly is the metrology capability.

As you know, as we progress with our technology, we also progress with the metrology capability.

So we have the capability to take some of the metrology enhancement that we do to the new tool, also do some upgrades to the old tool.

And the third element is, of course, software upgrades.

As always, we continue to enhance our software, and we are very strong in that, the part of the software capabilities.

So we go back and also install that on the previous models and the previous install base.

And additionally to that all, there are some trailing nodes that are asking to trade in their old tools for new tools.

And the way that we look of that, that part of our R&D currently, the investment that we do is to invest also in packages for the customer support or the service business.

So we more count on proactive sales into this install base, and by that, we see the growth on the last few years.

Great.

That's helpful.

And maybe as a follow-up question for me in terms of your Memory exposure over the last year, as you mentioned, it grew over 60% in 2018.

It was obviously driven by mix of both DRAM and 3D NAND.

We do understand the capital intensity trends in 3D NAND and the layers, and how it requires more OCD and X-ray metrology.

Can you discuss some of the capital-intensity trends on the DRAM front?

And how that's driving some of the business or the Memory growth on the DRAM side?

Yes.

So I'll start first by saying that it's different between DRAM and vertical NAND.

So in DRAM, it became almost like in Foundry, and when you're looking right now on the challenges that we see on the current 1X, 1Y, 1Z technology nodes, you see that there are emerging challenges for many of those 3D layers that require more intensity on the DRAM.

So that is -- when you go right now to advanced node in DRAM, you see more intensity on those tools.

VNAND is a different story.

So in VNAND, up to the certain amount of layers, which is around -- depends on the customer, between 64 to 96 layers, the intensity was the lowest between the segments.

But looking right now on the challenges going ahead, moving from 96 layers and above, we start to see new challenges, and this is why are Nova coming into play.

For example, you can't build anymore the stacks with one etch process.

So you need to start building multistack capabilities.

So when you have multistack capability, you started to see overlay problems between the stacks.

You see some tilts between the stacks.

So suddenly we see more demand from density once you move from 64 or 96 layers and above.

And those are totally different challenges that we saw before if it was under etch, over etch and high aspect ratio applications.

And looking right now on those new application, they require more metrology, and actually it's not the traditional or simple metrology.

And when you're looking right now on our revenue, the combination of X-ray together with optical and our ability to get it in with smart algorithm phase actually gave us the wins exactly on those applications in Memory.

Great.

And final question for me for Dror in terms of OpEx and the trends as we look at 2019 as a whole.

Obviously, there's a few moving pieces like you said on the R&D front, but given that you're also expanding or transitioning your locations in both the U.S. and Israel, CapEx is going up.

What are some of the swing variables for OpEx as we look at 2019?

So I think that the main issue right now is what Eitan mentioned on the fact that the company is actually rolling into the market 2 new technologies right now.

And hopefully, we expect to add another one through the year.

And this has -- definitely has impact on the level of operating expenses.

On the other hand, we are aware of market conditions, and we are doing our best to contain the operating expenses as much as possible.

Looking forward at this point in time, our best assumption is that operating expenses through the year will be at the same level of the first quarter or slightly lower.

We'll take our next question from Quinn Bolton with Needham & Company.

I wanted to get your thoughts on just sort of how you see sort of the spending patterns between Memory and Foundry and the mature nodes as you come through 2019?

Certainly seems like Memory spending will be weaker in the first half with some potential for recovery in the second half.

But would love your thoughts how we should be thinking about just the spending trends in the advanced Foundry and the mature nodes part of the business.

Yes.

So, Quinn, this is Eitan.

I'll try to at least start answering that.

So part of my remark, I talked about the Memory weakness, which is not new to anyone.

We exposed to that in the last few months.

It probably will continue in the first half.

And also, I said in my remarks that we may see an upside on the second half towards Q4 because of too many events.

One is the Memory rebound and secondly TSMC Phase 2, 4 and 5. And the reason that we talked about is actually a couple.

One, when we're looking right now on the memory cycles, mainly DRAM, in the last few years, we see that the DRAM cycles are becoming shorter, okay?

So the market is becoming more responsible, companies are becoming more resilient, and before the cycle of the supply demand was around 2 years or even more.

We can see that in 2009, it was going down to 9 quarters, and if you analyze what happened in 2015 and '16, it actually went to 5 quarters.

Assuming that there is long-term demand for DRAM, which this is what we believe, and if you take 5 quarters or even 6 quarters from the date started to slow down, we believe that somewhere in the second half, we'll see some rebound in DRAM.

This is our expectation.

Secondly, regarding the vertical NAND, so it's -- there's no way to go back to [Atlanta], right?

So the investment in this Memory device will continue.

We think that company has to digest the capacity that they took aggressively last year.

And therefore, we think that the price models and the oversupply that we see currently will be optimized somewhere in the second half.

And the third issue is the TSMC one.

Looking right now on the CapEx that they announced and the amount of equipment that they took as well as the earnings that we had with the largest semiconductor company, process company few weeks back, we assume that somewhere in Q4 or Q1 2020, they will start to take equipment again for Phase 2 of N5.

And it's usually with TSMC the same thing every year.

So they plan it somewhere in Q4.

Some of that pull in, some of that's pushed out, but we think that currently, they will pull in.

So that's a cycle that we see.

But from the current visibility that we have on H1, we don't see the Memory rebounding.

So this is why we think that H2 probably will be stronger.

And beside the market that we just talked about, we are rolling out at least 2 new products, which are new technologies to the market which has high value.

And if they will be able to be successful in the market, probably we'll see a multimillion revenue coming to Nova by the end of 2019.

So this is why we talked about -- a bit about what happened in the second half.

Hope it's helpful, Quinn.

Yes, very, very helpful, Eitan.

I wanted to follow up on the 2 new metrology technologies.

I think you said that you have those technologies now at 2 customer sites.

Wondering if you could comment, are -- you have both technologies under evaluation at each customer site?

Or is it one technology per customer?

And can you give us any sense or the applications of the new technologies more applicable, say, in advanced logic DRAM or the NAND side of the business?

So generally, those 2 new technologies which are different from each other, they are not similar, are installed in 2 different customers.

And I want to restrain from exposing the name of the customers as it's some competitive information that's embedded in that.

I just can say that those technologies were not planned to answer one segment.

So it was not planned to do only Memory or do only Foundry.

When we're looking right now on the advanced nodes and the challenges which we see on the market, we see that some challenges -- and I talked about it when I answered Patrick.

I think that part of that -- not -- cannot answered by the traditional OCD or X-ray tools.

So we had to come out with 2 types of technology that can complement our traditional metrology in order to answer those growing challenges.

Now those 2 technologies are, when we're saying evaluation, it's a complete tool that will shift for alpha and beta, and we definitely hope to see some good results in the next coming months.

Maybe just a quick clarification for Dror.

Dror, you mentioned the gross margin in Q1 would be slightly below the long-term target because, in part, of new products.

Were you referring to those new technologies?

Or are these just sort of upgrades to existing metrology tools?

No, these are not the new tools.

These are tools which are new versions of the existing technologies that we offer in the market, which are moving into the mostly high-end applications in the market, including the N5 technology node that Eitan mentioned.

We'll take our next question from Mark Miller with The Benchmark Company.

Staying on the course of X-ray and metrology, with these 2 new tools, I assume that you're expecting that X-ray sales will grow year-over-year in 2019.

Any indication how much?

So, Mark, we don't break down the numbers, but we do see from last year significant increase in our sales of the X-ray tools.

I just want to put a disclaimer on the new technologies.

The new technologies are not necessarily doing -- using the same technology as we used before.

So it's not necessarily X-ray or not necessarily optical.

And the margins for these X-ray tools, are they at or below the margins for your other tools?

The X-ray tools are at the same gross margins as the optical tools.

You have a little different distribution of 10% customers; you had 5% last quarter, 4% this quarter.

Is this indicative of domestic Chinese memory manufacturers just pulling back?

Why is this a little bit different this quarter?

Yes, I think the main issue here is investment patterns with -- by the different customers.

TSMC has several quarters of investment and then digesting and so are others.

So it's just reflective of the general investment patterns of the specific customers.

The most important thing for us is our ability to be exposed across segments and territories and across these customers in order to be able to enjoy any investment cycle within the industry.

Mark, this is Eitan.

I would like also to add to Dror on the business side.

Looking right now on the fourth quarter and the customer distribution, this is exactly what the company aimed at the beginning of the year.

You have 3 strong Memory customers.

Dror named them, okay, which is Samsung, Micron and Hynix, which we long -- for a long time, we did the penetration effort in order to take the market share and they are -- it proved itself to be sufficient and good and this is why they are in the 10% customers in the fourth quarter.

We have TSMC that started to invest heavily in N5.

This is why you see them growing in the fourth quarter.

And regarding the Chinese market, the fifth customer is Huali, which we have 100% market share in the -- actually becoming the -- one of the largest foundries in China.

So we see China, we see Taiwan, we see Foundry, we see Memory.

We see in Memory both NAND and DRAM.

And actually, this is reflecting the exposure or the balanced exposure that we have to different territories and different segments.

Okay.

You mentioned you're starting to see some replacement at trailing nodes.

Any estimate what percent of sales are coming from these replacement of existing tools at the trailing nodes?

So it's not a phenomena that we can name as a significant percentage.

What I said is on the service support part is that sometimes those trailing nodes, which are heavily crowded, like, for example, 28-nanometer, there are some expansions happening there.

And some of the old tools that are installed there for the last 5 to 6 years are not currently giving enough productivity or enough metrology capabilities.

So on those trailing nodes, we see sometimes the request in order to upgrade them either to a new version or a new node.

But it's not something significant that we should talk about as a significant part of our revenue.

It's one of the phenomena and not the significant part.

To the tools that were introduced 5, 6 years ago in terms of light source or detectors, do they have the technology or the power to basically work for the current nodes or the more advanced nodes?

Or do you have to upgrade detectors or also light sources?

No, no need to replace detectors.

I'll share with you the issue on the trailing nodes usually coming on the advanced technology providers.

Usually what happens today, and the main trend is to combine memory over logic device, what we call, embedded memory.

It can be SRAM, it can be MRAM, it can be under ReRAM capability.

Therefore, those devices are becoming very challenging to optical capabilities.

So therefore, because it's becoming a very complex stacks, usually require some advanced metrology.

So it's not relevant to the source.

It's not relevant to the -- to other capabilities on the hardware.

It's usually we make the tool that will be much more precise, much more accurate and even on the new tools that we are coming in, sometimes they are with the same source.

So the source is not an issue.

It appears there are no further questions at this time.

Mr. Oppenhaim, I'd like to turn the conference back to you for any additional or closing remarks.

Thank you, operator, and thank you all for joining our call today.

By that, we conclude our Q4 and full year 2018 earning conference call.

Thank you.

This concludes today's call.

Thank you for your participation.

You may now disconnect.