Ultra Clean Holdings Inc (UCTT) 2011 Q1 法說會逐字稿

Good afternoon. My name is Taprica, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ultra Clean Technology second quarter financial results conference call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session.

(Operator Instructions)

Joining us today is Mr. Casey Eichler, Chief Financial Officer, and Mr. Clarence Granger, Chairman and Chief Executive Officer. I will now turn the call over to Mr. Eichler. Sir, you may begin.

Thank you very much. Welcome to our first quarter financial results conference call. With me today is Clarence Granger, Ultra Clean's Chairman and Chief Executive Officer. I will begin by presenting the financial results for our first quarter, and Clarence will follow with some remarks about the business. A few moments ago, we issued a press release reporting financial results for the first quarter, ended April 1, 2011. The press release can be accessed from the investor relations section of Ultra Clean's website, along with the information for the tape delay and replay of the live webcast at UCT.com.

Together with our recently issued press release, this conference call enables the Company to comply with the SEC regulations for fair disclosure. Therefore, investors should accept the contents of this call as the Company's official guidance for the second quarter of fiscal 2011. Investors should note that only the CEO and CFO are authorized to provide Company guidance. If at any time after this call we communicate any material changes in guidance, it is our intent that such updates will be done officially via public forum, such as a press release or publicly announced conference call.

The matters that we discuss today include forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995, related to matters including our future financial performance, new product orders and shipments, and industry growth. Investors are cautioned that forward-looking statements involve risks and uncertainties that may cause the actual results to differ materially from those projected in the forward-looking statements. Some of those risks and uncertainties are detailed in our filings with the Securities and Exchange Commission. The Company disclaims any obligation to publicly update or revise any such forward-looking statements, or to reflect events or circumstances that occur after this call.

Now, here are the first quarter financial results. Revenue for the first quarter was $126.7 million, or an increase of 5% from the prior quarter and an increase of 29% when compared to the same period a year ago. Semiconductor revenue for the first quarter was $101.2 million, or 80% of total revenue, while non-semiconductor revenue was $25.6 million, or 20% of total revenue for the quarter. When compared to the first quarter of 2010, semiconductor revenue grew 29%, and non-semiconductor revenue grew 28%. Revenue outside the US was 29% in the quarter, compared to 27% in the prior quarter, and 21% in the same period a year ago. Gas delivery systems represented 58% of our revenue for the quarter, compared to 50% in the fourth quarter and 55% in the same period a year ago. The increase in gas delivery systems quarter-over-quarter was primarily due to growth in our high-brightness LED market.

Gross margins for the first quarter increased to 13.9%, compared to 12.3% in the fourth quarter, and 12.6% in the same period a year ago. Operating expenses were $9.4 million, or 7.4%, an increase of $354,000 from the prior quarter. Our operating expenses as a percentage of revenue should continue to be in the range of 7% to 8%, as previously discussed. Our operating income was $8.2 million, or 6.5% before interest, expense and income taxes; compared to operating income of $5.8 million, or 4.8% in the fourth quarter; and $4.6 million, or 4.7%, in the same period a year ago. An income tax expense of $2 million was recorded in the first quarter. The tax rate for the second quarter should be modeled at 26%.

First quarter net income was $5.8 million, or $0.25 per share. This compares to a net income of $3.9 million, or $0.17 per share in the fourth quarter; and net income of $3.9 million, or $0.17 per share in the same period a year ago. The fully diluted share count was $23.5 million, an increase of 486,000 shares from the prior quarter. Non-cash charges for the first quarter were $1 million related to FAS-123R, and $639,000 related to depreciation and amortization.

Turning to the balance sheet, cash was $35.3 million, an increase of $629,000 from the prior quarter. Cash net of third-party debt was $8 million, an increase of $2 million during the period. Accounts receivable was $58 million, up $3.4 million from Q4, and days sales outstanding stayed flat at 41 days. Accounts payable of $48.7 million increased approximately $2.8 million. Days payable outstanding at the end of the first quarter increased to 40 days from 39 days at the end of the fourth quarter. Net inventory was $65.2 million, an increase of $5.9 million over the prior quarter. Inventory levels are projected to stay flat during the second quarter of 2011. Now Clarence will discuss our operating highlights for the first quarter. Clarence?

Thanks, Casey. I'm pleased that during the first quarter of 2011 we began to correct the operational inefficiencies I spoke about in our last earnings call. As a result of this focus on operations, our gross margin and earnings per share returned to more acceptable levels. As Casey stated earlier, gross margins increased from 12.3% to 13.9% during the first quarter; and we saw an overall revenue increase of 5%, once again achieving a new quarterly record revenue of $126.7 million. In addition, revenue from our Asian operations increased from 27% of total revenue in the fourth quarter to 29% in the first quarter -- an increase of 11% quarter-over- quarter.

I'll now provide highlights of our activities and accomplishments for the first quarter. As stated in previous quarters, our biggest near-term growth opportunity, by far, continues to be in the high-brightness LED market. During the first quarter, we achieved our stated goal by shipping multiple orders for LED-related gas delivery systems to multiple customers for a total of $11.4 million in revenue, up from $6.1 million during Q4, and $2.4 million in Q3 of 2010. The $11.4 million in LED-related revenue shipped during Q1 also exceeded our $9 million target for the quarter, which was established during our last quarterly conference call. We continue to receive additional production and qualification orders from multiple customers at our projected rate. We anticipate that this will result in LED-related gas delivery revenues of greater than $14 million during the second quarter of 2011.

Last quarter, I stated that we're starting to see more activity within the solar-related business sector. I'm pleased to announce that we shipped our first qualification units to the new customer, which was announced last quarter and have now received our first production orders from that customer. This customer is an established player in the solar market, and should add $3 million to $5 million in new solar-related gas delivery systems business to UCT during 2011, with significant growth potential in 2012 and beyond. This product will be manufactured in China, further increasing our Asian-based revenue. In general, our relationship with all of our customers remains very strong.

As was discussed in our press release at the beginning of March, Dr. Gino Addiego has joined UCT as its new President and Chief Operating Officer. Gino brings a background of strong operational and technical experience to UCT. He has held executive positions at a variety of capital equipment companies within Silicon Valley, where he was responsible for global operations and engineering groups. The addition of Dr. Addiego completes our executive team and will be instrumental in achieving our long-term operational and strategic goals.

As mentioned earlier, we experienced an increase in revenue from our Asian manufacturing operations from 27% of total UCT revenue in Q4, to 29% in Q1. We anticipate continued ramping of production in our new Singapore facility during 2011, as well as our two Shanghai, China-based facilities. Also this year, we anticipate additional growth in the percentage of revenue from our Asian facilities, with the continued transfer of US production to China and Singapore in support of the activities of our key customers. This migration of manufacturing to Asia is consistent with the long-term plans of several of our major customers to migrate more of their supply chain to Asia.

I'd now like to shift to our guidance for the second quarter of 2011. In the second quarter, we are projecting an increase in revenue and EPS. Our revenue guidance for the second quarter is $128 million to $133 million, with earnings per share in the range of $0.26 to $0.29. As Casey discussed earlier, the tax rate for the second quarter should be modeled at 26%.

In summary, during the first quarter of 2011, UCT began to recover from the operational inefficiencies that occurred during our fourth quarter of 2010. And, while we have not yet fully recovered, we believe that we are well on our way to doing so. In addition, we continue to experience growth resulting in record revenues and an increase in revenue within our Asian facilities. We're also very pleased with the addition of Dr. Gino Addiego as our President and COO. Looking forward, we are excited about further growth in Asia and anticipate an increase in significant new business opportunities, particularly in the high brightness LED market during Q2 and beyond.

In closing, we're more confident than ever that 2011 will be another year of record growth and profitability for UCT. With that, operator, we would now like to open the call for questions.

(Operator Instructions). Your first question comes from the line of Edwin Mok.

Hi. Thanks for taking my question, and congrats for a great result in guidance. So first question I have is if I take a look at your non-semi business excluding LEDs, isn't that declined a little bit sequentially? Can you help us out in terms of explaining where the decline comes from?

Boy, that was quick, Edwin. Hey, you're supposed to talk about the good news. You're correct, we did see some declines both in our research area and in our medical area. In neither case did we see a loss of market share. It was simply a function of what happened to our customers. In the particular case of our research customer, they had a very, very strong Q4, and the Q1 revenue is more consistent with what we've had from them long term. And then, with the case of the medical customer, again, we have one primary medical customer. Again, they saw a slight downturn in Q1, but we're expecting to see more than a bounce back to higher than Q4 levels in Q2.

Great. I figure I'll get the tough question out first. Second thing is regarding to gross margin, very, very strong rebound, looks really good. Just a question. How much of that is related to mix because you mentioned you have a higher mix of gas panel as well as Asia sales versus just improvement in your operation? And it seems like, based on your guidance, you're implying basically a high gross margin in the second quarter, right? Should we look a bit beyond just the near term?? How do you think about your gross margin as you reramp these LED [sales]? Do you expect to get back to about 15% in the back half?

Again, I'll let you work to the margin number for Q2 based off of what we talk with you about, but you're right. It would imply that we think there's going to be recovery there as well. Things like mix, whether it be product mix or Asia to the US and that, that's part of the business that you just deal with quarter to quarter. And sometimes it works in your favor, and sometimes it doesn't. I would say a majority of unfortunately the shortfall in Q4 and then the recovery this quarter and next is really operation-related. And that's a lot of the things that we started in October of last year as we started to work through some issues. But I think already Gino is having a great impact on the business. I think we're getting a lot of different ways to think about things and look at things, and so we're optimistic about moving forward as well. So it's a combination of everything, but I think basically it was some operational changes that we talked about last quarter we wanted to make. We've got those done. Now we're stabilizing everything and growing off of that, and we think with the addition of Gino that we're going to have great success with that.

Great.

Edwin, this is Casey -- Clarence. I'd just like to follow on with that. Of this not a mix-related phenomenon. This was an improvement in operational execution which we expect to continue going forward.

Great. So sounds like you guys are confident that on the back half there is chance for improvement beyond your 2Q implied level?

Yes. I mean we're taking this one quarter at a time, but we certainly feel there's opportunities to continue to improve the business throughout the year.

Great. Very, very helpful. And then just touch on LED a little bit. Obviously you guys had a really good result on 1Q and guiding for higher again on second quarter. So things look like it's progressing. I'm just curious in terms of customer concentration, do you see that as a risk because I imagine you have -- that space itself is re-concentrated and you have more leverage to one particular customer. Do you see that as a risk if that particular customer decides to dial back a little bit? And you mentioned, you are shipping for multiple customers in this quarter. Are you seeing the outer smaller customer starting to ramp in the coming quarters?

Yes. So I guess what I would say, Edwin, is we think we're ramping with all of our customers in the high brightness LED market. Obviously, we do have the preponderance of our revenue associated with one customer, but we do think that customer is in a strong position. And we also think, again from our perspective, we're in a very good position because we're growing from literally a position where we had no revenue associated with this industry to where we're becoming a significant player.

Great. Just two more questions, one just a followup to the LED. So seriously talked about potentially having 25% market share in that space as you ramp your position in that space, right? Is that your target, let's say medium term target, or do you have any way you can shed some light in terms of where you think your market share can grow in that space?

Again we're sticking with our previous commitments. We were targeting to get close to $30 million by the end of this year on a quarterly basis. We think we can do that.

Okay, great. Helpful. And then lastly on so looks like great having new customer ramping, right, and you mentioned that you have more confidence about potentially growing even faster in 2012. Can I just ask what gives you the confidence about that? Is it just increased penetration of that customer, or are they sharing with you their build plan or what gives you the confidence that will ramp even at a faster rate in 2012?

Sure. First of all, we now have two solar customers. One is a traditional semiconductor customer that's been a customer of ours for a long time, and they're very optimistic about their growth in 2012, in 2011 and 2012. We would expect to fully participate with them. The reason for the confidence with this new customer is that this is an existing product for them, and we are just capturing market share. And so they are in fairly significant volume production already. The one product that we've been awarded should have significantly higher volumes in 2012.

I see. Great. That's all I have. Thank you.

You're welcome. That's, Edwin.

Your next question comes from the line of Krishna Sankar.

Yes. Congratulations on a great quarter, folks. On the semiconductor equipment business, can you talk a little bit about all the trends there and any pushins or pushouts by some of the leading (inaudible) customers and what you're seeing there in terms of order trends and business conditions?

Well, we've seen a little bit of both. This is Clarence, Krishna. We've seen a little bit of both. Some -- there have been some pushouts by some fairly large end users recently. At the same time, there's also been some pull-ins by Intel. So we're fairly optimistic that while in Q2 we're anticipating a slightly higher growth rate in our non-semiconductor business, our semiconductor business should be on similar levels to our Q1 levels.

Okay. And how would you describe the growth in operating margins for the non-semi business, specifically LED and solar versus the semi-equipment business? Are there any significant differences?

There really aren't once you get something ramped and fully in operations in full production. Initially when you're ramping, there's always some inefficiencies and learning curve that you have, but whether be it semi or non-semi, once a product is being manufactured in full production, there really isn't a difference.

Great. And for the quarter again, can you mention those three metrics you've laid out for growth drivers, the Asia as a percent of revenue, the percentage of high level integration systems and non-semi business?

Yes. So our semi versus non-semi was 80% semi, 20% non-semi. And that, obviously we've tried to continue to put a balance in the business and will continue to put a balance in the business. From an Asia perspective, it was about 29% Asia and about 71% the US. And again as we've talked about in the past, as business increases, 30% was the highest we've ever had, and as we continue to increase our business in Asia, that helps give us some leverage in our model. When you look at gas delivery versus non-gas delivery, we had about a 50/50 blend going there. That changed a little bit, and as I commented, the business that's ramping up in LED is technically gas delivery. And so that's what's bringing that back to a 58% to 42% in the current quarter. And as that builds, that could continue to move a little bit in that direction, but we're still having good success outside of the gas delivery, what we call high level integrations as well.

I had a question. Did you retreat your goal for HB-LED manufacturing revenues of, is it $30 million a quarter by Q4?

Yes. That is exactly what Clarence has said and continues to say. I think what Edwin was asking earlier is do we have aspirations beyond that. And clearly, when you don't have any business, you look to get second source and start to build a position in the market. We think that as a leading supplier in gas delivery, we have a great opportunity and doing high level assemblies to do a lot more in that industry, but right now we're very, very focused on the goal that Clarence set out about a year, year and a half ago. And I think we're making great progress.

Great, thank you.

You bet.

You're welcome.

Your next question comes from the line of Dick Ryan.

Hi, good afternoon. Good quarter, guys.

Thank you, Dick.

Thank you.

Say, from the restructuring or the inefficiency moves, I think you pretty much took care of most of those in one fell swoop, but are there any other issues there that are being tended to or is that pretty much behind you?

No. Obviously we were at 14.5% gross margin in Q3, and we're at 13.9% now. So, and our long-term goal is to be between 15% and 18%. So we haven't got it all behind us, but we think we've got the majority. We still are running a little higher and over time than we would expect, and we still have some other operational challenges. But one of the things that I had mentioned in the last quarter call is that we had several new players in various key executive roles throughout the Company. They've now all of those executives have now had one quarter under their belts, and one of the other plants that was experiencing some inefficiency has a new leader in place. So we're very comfortable that we've put the right people in place to take us forward, and now with the addition of Gino we think we've got some more stability and strength at the executive management level.

Just to be clear, Dick, you know, obviously we're again we're staying this step by step. We're not going to be happy at 14.5% either. We see a lot of opportunity to continue to build our margins and do things more efficiently, more effectively as revenue ramps. And so we're going to continue, but what I think Clarence said initially said, it was going to be a couple quarters to get back to where we were and then move forward from there. But we know that we continue to have some work to do there, and we think we've got some pretty good idea on how we're going to do it.

Our model continues to be 15% to 18%.

Good. On the LED side, is any production coming out of Asia for your LED business at this point or in the near future?

Yes. Some of our production is, but right now it is by far the majority -- minority of our production. I would expect to see some production ramp in Asia as we move into Q4, but the -- any major shift to Asia would occur in 2012.

Okay. And the higher than expected level of LED business in Q1, was that a competitive issue? Was it just the way the business was flowing through or can you address what your -- visibility you have there?

Yes. It was not a competitive issue. It was new product-related activity and slightly earlier adoption or slightly greater demand for a new product than was originally given in the way of guidance to us.

And you're still shipping prototypes?

Both prototypes and production volumes.

Great. Okay. That should be it for me. Thanks, guys.

You're welcome.

Thanks, Dick.

(Operator Instructions). Your next question comes from the line of Jay Deahna.

Thanks very much. Nice quarter, guys. Nice to see you executing like you traditionally have, and nice to hear you guys sounding confident once again.

Thank you, Jay.

Sure. Couple of questions. First question here, on your new solar business is that thin film amorphous silicon or is that c-Si, crystalline silicon?

It's on the wafer side.

So crystalline?

Yes.

Is that an existing tool in a traditional c-Si process, or is that a new type of tool which is working its way into the process?

It's a traditional tool that's already in volume -- being used in volume.

Okay. Secondly, regarding Gino -- Dr. Addiego. What has been the initial customer reaction as you've gone out to meet customers, the Applied, the Intuitive Surgicals of the world, across your customer base to his arrival? That is number one. And, number two, given that he has been in charge of significantly more complex operational organizations than Ultra Clean presents, what does he plan on doing here to drive that gross margin for that 15,%, 18% besides what you guys already were looking at?

First, with regard to the customers, one of the things, one of the benefits of Gino is he has worked at Novellus, and Applied Materials and KLA, and has an excellent reputation throughout the industry and with all those customers. So I do think in the long run, having a COO that's well-versed in the industry with a strong reputation is a positive benefit to UCT. Obviously, ultimately, market shares and things of that nature are decided based on performance, but the fact that Gino is well respected does enhance UCT's reputation within the industry.

Second, with regard to more complex operations, I guess what I would say is while I'm sure there are significantly more complex operations within the industry, UCT is primarily a manufacturing Company, and we do tend to manufacture fairly complex one-of-a-kind-type tools and subsystems. So I think our requirements for somebody with a strong operational background and an expertise in this area where we're tending to do custom manufacturing I think is a very strong fit for UCT. And I think it won't be too simplistic for him. I think our challenges are ones that are going to ideally utilize Gino's capabilities. So I think we're off to a good start already, and I think he's going to be a strong asset to us, both in the short term and long term.

Okay. Then one follow-up on this topic. You mentioned that he has history at KLA and Novellus. It's my perception that those are two entities that probably could be significantly bigger customers for UCT. So do you think that over time that whether it's your sales and marketing efforts or those enhanced by Gino's presence, that in addition to driving some operational performance improvements, do you think he can have an impact on maybe generating some revenue upside?

Well, obviously our goal is to use all aspects of our capabilities, and certainly personal relationships are an advantage in trying to access new opportunities and get some doors open that may not have been open otherwise. So while we're not expecting anything specific, certainly it's an advantage having good relationships in the industry.

Okay. On the LED side, it's pretty clear that there's a transition underway now in the MOCVD world to cluster tools. And I think it's fairly safe to assume that you're engaged with at least one market leader there. I'm curious to know if you look at perhaps other major MOCVD players or even some of the minor players, do you feel like you're either shipping commercial volumes or prototypes into all of the OEMs of MOCVD cluster tools that you would consider likely to be major players over time?

My customers are very sensitive about what I say in this regard. So there's really not too much I can say other than what we've already said is that we're shipping multiple products to multiple customers both production-related and new product orientation. So we are optimistic that we're going to do well with multiple customers in this market, but that's pretty much all I can say.

I see. Just to take a stab at it one other way on that one, would you expect to be a proxy, if you will, for cluster tools looking out into the 2012/2013 time frame, sort of the way you are on CVD and domestic etch systems and semi?

I just again, Jay, I have to be very careful what I say here. Again, we're very optimistic about our penetration of this market. We think we're doing well. We think it's going to be a significant revenue driver for us, and obviously a lot of what we're talking about is new product related.

Okay, great. And then two more quick ones here. If you look at your various end markets, you got semi, you got LED, you got research, you got flat panel, you got solar, et cetera. If you look at each one of those, and then aggregate it, would you say that your customer inventories of your products, whether it's gas or robots or whatever, would you say that your customers' inventory in web and in finished goods could be, at this point, considered about right, maybe not quite enough or too much?

Well, most of what we do is custom. It's built to order. So our customers rarely have much inventory of our products with the only repetitive product we build is the robots for Intuitive Surgical. Other than that, everything is custom. And in all cases with Intuitive Surgical and all of our other customers, they maintain relatively low inventory levels. So our demand is likely to fluctuate with their demand, and we don't expect to deal with higher levels of inventory at our customer sites.

So you're of the opinion that generally speaking, your customer inventories of your products are in the normal level at this point?

That's correct.

Okay. Because I remember in the past, for example, and I don't know if it was 2008 or what it was, in the recent downturn there was a little bit of buildup for obvious reasons among your semi customers, and then there was all kinds of rework going on that created some problems you may recall.

Sure, sure, Jay. That was obviously that was in 2009. That was obviously a unique situation in the industry. All of our customers really had very few, if any, new orders, and they were looking to find anything they could in their inventory to consume their inventory to bring down their equipment or their inventory situations. We haven't ever seen anything like that before. That was certainly unique. One of the things that's interesting right now is our customer -- part of what we do is do some refurbishment work, and our customers are having a hard time finding older tools to do refurbishment work on. So I would be surprised if there was any buildup of older tools or anything of that nature at our customers' sites.

Okay. So a few DRAMer foundry tools may be moving out like Lam suggested and maybe some Intel moving in or whatever isn't going to create any inventory-related indigestion in the near term, do you think?

Yes. Any customer pushouts, they're not sitting on a bunch of our inventory, that's correct.

Okay. And then finally, Clarence, if you look at what Lam said in semi, Lam is one of your customers. They were suggesting that 2Q would be a little bit slow for them, and obviously they have a problem because Intel is not a customer to offset some of the foundry DRAM pulls where it would be for other people, right? But they were pretty optimistic about the foundry and the DRAM scenario in the second half of the year. So if we use that as a proxy for semi, we look at your commentary about solar, LED, subsystems for you trending up towards $30 million by 4Q, look at the trends from the results of Intuitive Surgical, et cetera, and we overlay that with your commentary about wanting to get your margins up, and Gino's impact and all that, it sounds to me like you guys are looking at at least the next two or three quarters of being up sequentially in both revenues and margins. Is that the wrong way to look at it, or does that make sense relative to everything that's been said and observed?

Jay, you know we don't give guidance beyond one quarter, but obviously we're very confident in Q2. And I did say in one of my remarks that we're confident that 2011 will be another record year of growth and profitability.

Okay. Fair enough. Thanks very much.

You're welcome.

(Operator Instructions). Your next question is a follow-up question from the line of Edwin Mok.

Hello, thanks for taking the follow-up. So first just want to be really clear, on the second quarter guidance, do you expect the semi-equipment business to be flat, up or down? And what is baked into your guidance right now?

The semiconductor equipment business in Q2 will be slightly down, but not significantly. And our growth in non-semi will -- our projection is that it will be more than offset our slight decline in semi.

Great. Very helpful for clarifying that. Second question I have, a question for Casey because Clarence has been talking for too long. So just a quick question on the tax rate. What drove you to report a lower tax rate and a lower tax rate guidance for the quarter? Is it just one time items, and how do you think about longer term in terms of your tax rate?

Yes. I don't know that I would change the second half of the year from the 28% that I had guided to at the beginning of the year. As you know, Edwin, depending on how your mix is between Asia and the US and how you have yourself structured, it's not an exact science. It's like understanding what semi is going to do second half of the year. There's a little bit of variability there. So we came in a little bit less. When I look at this quarter and the way the makeup is, I think we'll probably stay consistent there. Overall, I think it could trend a little bit higher. But, we've got several things out in front of us as we continue to adjust our structure globally, look at how our taxes, deferred taxes and our reserves are put together that could impact that. But right now I just felt that 26% was probably fair for Q2 and I don't it know that I would change the earlier guidance for Q3 and Q4.

Great. Very helpful there. One last question, just a question on current events. So Brooks recently announced that they sold the contract manufacturing business. Do you see that as an opportunity for you guys, or do you see that as increased competition from a large EMS. How do you think about that deal?

Well, Edwin, this is Clarence. It's not an area that we targeted to get into. They do front-end modules, and so it's different. We've never competed against that group. We don't see that as a competitive environment. We think those products tend to be a little more repetitive than what we do. We think of our products as tending to be more highly customized to each end user application. So, it's obviously of interest to us, but it's not a direct -- directly related situation.

Great. Very helpful. There's no real impact on you guys. Great. That's all I have. Thank you.

You're welcome.

Thank you.

At this time this are no further questions. I would like to turn the call over to Clarence Granger for closing remarks.

Great. This is Casey. Well, we appreciate everybody calling in and look forward to talking to you throughout the quarter. We are going to do a couple conferences in May, one at the beginning of May and one at the very end of May, beginning of June. And so we look forward to continuing to tell you about the story, and we're very excited about it. So thank you very much.

This concludes today's teleconference. You may now disconnect.