U.S. Markets closed

Edited Transcript of NVMI earnings conference call or presentation 1-May-19 1:00pm GMT

Q1 2019 Nova Measuring Instruments Ltd Earnings Call

Rehovot May 7, 2019 (Thomson StreetEvents) -- Edited Transcript of Nova Measuring Instruments Ltd earnings conference call or presentation Wednesday, May 1, 2019 at 1:00:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Dror David

Nova Measuring Instruments Ltd. - CFO

* Eitan Oppenhaim

Nova Measuring Instruments Ltd. - President & CEO

================================================================================

Conference Call Participants

================================================================================

* J. Ho

Stifel, Nicolaus & Company, Incorporated, Research Division - MD of Technology Sector

* Jaeson Allen Min Schmidt

Lake Street Capital Markets, LLC, Research Division - Senior Research Analyst

* Mark S. Miller

The Benchmark Company, LLC, Research Division - Research Analyst

* Quinn Bolton

Needham & Company, LLC, Research Division - Senior Analyst

* Miri Segal-Scharia

MS-IR LLC - CEO

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good day, and welcome to the Nova Measuring Instruments First Quarter 2019 Results Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Miri Segal of MS-IR. Please go ahead.

--------------------------------------------------------------------------------

Miri Segal-Scharia, MS-IR LLC - CEO [2]

--------------------------------------------------------------------------------

Thank you, operator, and good day to everybody. I would like to welcome all of you to Nova's First Quarter 2019 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.

--------------------------------------------------------------------------------

Eitan Oppenhaim, Nova Measuring Instruments Ltd. - President & CEO [3]

--------------------------------------------------------------------------------

Thank you, Miri, and thank you all for joining our first quarter financial results conference call. I will start the call today by speaking about our first quarter results and performance highlights. I will then provide the guidance for the second quarter of 2019. Following my commentary, Dror will review the quarter's financial results in detail.

Nova delivered solid results in the first quarter, demonstrating the efficient business model we have built which is based on growing diversification in our revenue, customers and technologies. Through the quarter, we continued to execute our plan firmly in spite of the challenging near-term industry environment.

All key financial metrics for the quarter came in above the midpoint of our guidance, with both non-GAAP and GAAP EPS exceeding the high end of the guidance range. This strong outcome in a fundamentally volatile market is a result of the steady progress we are making in strengthening our operating model, differentiating our portfolio and increasing our value in a larger addressable market.

Our performance continues to be supported by a balanced customer mix, which included 5 large customers. This group of leading customers included 3 Memory and 2 Foundry customers, which reflects the improved position and the progress we have made with each one of them. As a result, Memory and Foundry contributed evenly to our overall product revenue in the quarter.

Based on this balanced mix, we believe that once the market stabilized our stronger position would provide us with an advantage in several segments and support our long-term growth plan.

From a business perspective, we continued to enhance our penetration efforts and gained even stronger position with key accounts. One of the successful highlights from the first quarter is the selection of our VeraFlex x-ray inline materials metrology solution by a global leading Memory customer. This win already generated revenue in the first quarter and is expected to yield more as the customer continues to expand capacity and applications globally.

This selection is further evidence of our successful progress in expanding our reach into the growing materials engineering space, which undergoes massive changes and with that also many process challenges. We anticipate that in order to improve device performance today beyond the traditional geometry, scaling and verticality, IC manufacturers needs to embed more exotic materials in the process and engineering to be stable in high-volume manufacturing. The main outcome from this major shift is that process control for materials is becoming an enabler for inline production beyond qualification in R&D use cases.

Materials parameters will become increasingly important, while new generation devices are developed. According to our expectations, in the Memory segment alone, we expect materials metrology intensity to grow significantly from phase to phase. This materials inflection point is already reflected in our results in the last few quarters, where we successfully penetrated to all major Memory customers. We expect revenue to grow with these customers as they expand capacity.

As leader in this field, we enjoy this growth with multiple wins. We expect our unique offering to be a major differentiator and a strong growth engine going forward. Based on our analysis, by providing unique materials solution which are based on multiple technologies we can expand the available market by at least $200 million in the coming years.

An additional business highlight is the selection of our dimensional OCD metrology by a Memory manufacturer for developing its long nonvolatile advanced memory device. The selection included our newest i550, the latest addition to our integrated metrology portfolio. This solution emphasizes Nova's unique offering that interlaces hard work with advanced machine learning and deep training software engine to solve challenging applications which can't be solved by hardware alone in a wafer-to-wafer variation scheme. The success we have had with this latest integrated metrology platform is also reflected in the number of manufactured tools so far, which exceeded 100 units as of today, roughly a year from the product launch.

In addition, and as reflected by the customer revenue mix, we continued to extensively deliver our solution to the world's leading foundry for its 5-nanometer production line and 3-nanometer development line. As a result of the customer extensive evaluation, Nova's application portfolio was extended to include both front-end and back-end solution in multiple steps in order to solve the most complex logic challenges in high-volume production.

Despite the current uncertainty in the market, mainly induced by memory, we still believe that in the long term demand fundamentals will continue fueling the market beyond the extreme conditions. Therefore, we continue investing in our strategic plans to develop and expand our organic growth engine.

Our diversified portfolio, which is based on a unique and differentiated product strategy for both dimensional and materials process control, demonstrates clearly our competitive edge in a wider measurement capability, where a growing portion of our product revenue generate today is based on solution that only Nova can provide.

Following the 3 new generations of dimensional and materials metrology hardware model that we launched in 2018, we intend to focus on 2 additional growth engines in 2019. The first is to continue developing our machine learning software suite that significantly enhances our metrology capabilities and provide adaptive solutions. These solutions are gaining more traction with all of our customers and are recognized by the industry as breakthrough technology for improving yields and time to solution.

During the quarter, Nova and GLOBALFOUNDRIES were jointly awarded the Best Metrology Paper at the Advanced Lithography Conference for demonstrating adaptive metrology capabilities using machine learning engine and predictive metrology in high-volume production. Our uniqueness in predicting CD and electrical values from an inline measurement using machine learning engine has been implemented and are supporting our share gains with multiple customers.

The second is to continue aggressively prototyping our 2 main new technologies that we were talking about also in previous calls. These technologies have already been extensively evaluated by our main customers, with multiple tools already installed at customer sites. Both technologies reveal unmet solution for both dimensional and materials metrology, and we expect initial revenues from these new technologies in the second half of 2019.

To conclude my prepared remarks, I would like to briefly highlight the market condition as we see them currently. In our view, the spending environment is largely influenced by a decline in Memory spending in both DRAM and VNAND. We believe that although we should expect a year of slower spending, the longer term growth opportunity for the industry remains solid, fueled by more high-end applications that require better computation power and memory capabilities.

In our view, the second half performance still depends largely on 3 catalysts: inventory correction and capacity expansion in memory; foundry and logic yield improvement that will trigger further expansions; and the adoption pace of our new technology.

Though visibility today to the end of 2019 is challenging, our current view is that while an uptick in memory may occur in the second half of 2019, we believe that the large expansion will materialize mostly in 2020, which is starting to be developed into a solid growth year.

As for Nova, although we are not immune to the market volatility and current low visibility, we expect that given our widened exposure to multiple segments, customers and geographies, combined with the traction our differentiated portfolio is gaining in the market, we are well positioned to benefit from the long-term growth potential in multiple differentiated applications.

We envision 2019 as a transition year for Nova, which we believe will lead to a stronger year in 2020, where the main elements to support our growth are a wider available market as a result of materials exposure; a new portfolio rollout that will increase our value offering; and finally, our balanced exposure to all industry segments.

Before I provide the guidance for the second quarter, I would like to emphasize that although the market as a whole is experiencing a soft period our operational model and the value we bring to the customers continue to support healthy profitability and gross margin, as demonstrated in the first quarter. These fundamentals will continue supporting our investment in developing and rolling out new technologies.

As for the second quarter of 2019 guidance, we expect revenues in the range of $45 million to $53 million, diluted EPS on GAAP basis on the range of $0.09 to $0.26 per share and non-GAAP basis diluted EPS in the range of $0.17 to $0.35 per share.

Now let me hand over the call to Dror to review financials in details. Dror?

--------------------------------------------------------------------------------

Dror David, Nova Measuring Instruments Ltd. - CFO [4]

--------------------------------------------------------------------------------

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 first quarter of 2019 were $56.7 million, at the high end of the company quarterly guidance. Of the company products revenues, approximately 50% came from the Foundry and approximately 50% came from the Memory. On the customer distribution front, TSMC, SMIC, Samsung, Hynix and Micron were the large contributors to the company product revenues in the first quarter.

Blended gross margin in the first quarter was approximately 56% on a GAAP basis and 57% on a non-GAAP basis, within the company target model of 56% to 59%. Operating expenses in the quarter totaled approximately $22.9 million on a GAAP basis and $20.9 million on a non-GAAP basis, higher than the previous quarter. The increase in operating expenses in the first quarter resulted mainly from lower R&D income in the quarter.

Operating margin in the quarter was 15% on a GAAP basis and 20% on a non-GAAP basis. The effective tax rate of the company in the quarter was approximately 16%. Earnings per share in the quarter were $0.27 per diluted share on a GAAP basis and $0.37 per diluted share on a non-GAAP basis, higher than the company guidance for the first quarter.

As previously communicated, during 2019 the company will conclude the transition of its main offices in Israel and the U.S. to new locations. As a result, during the office transition period, the company is bearing duplicate office lease costs. In the first quarter of 2019, these costs amounted to USD 614,000 and were adjusted for non-GAAP representation purposes under the item facilities transition costs.

As discussed in the company previous conference call, starting January 1, 2019 the company was required to implement the new lease accounting rule known as ASC 842. This will require 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 rule implementation, the company balance sheet as of March 31, 2019, included an operating lease right-of-use asset in the amount of approximately $28 million, operating lease long-term liabilities in the amount of approximately $26 million and operating lease current liabilities in the amount of approximately $3 million. The majority of these lease liabilities are denominated in new Israeli shekel 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.

During the first quarter of 2019, the exchange rate differences and linkage to the Consumer Price Index of these liabilities amounted to USD 484,000. These costs were adjusted for non-GAAP representation purposes under the item revaluation of long-term liabilities.

Regarding the company outlook for the second quarter of 2019, at the midpoint of the company guidance we expect the following: blended gross margin is expected to be approximately 56%; operating expenses are expected to reduce to approximately $22 million on a GAAP basis and approximately $19.7 million on a non-GAAP basis; effective tax rate is expected to be approximately 15%.

I will conclude my prepared remarks with the cash reserves of the company, which increased to $193 million at the end of the first quarter and will enable the company to explore business development opportunities in parallel to the execution of the company's $25 million share repurchase program.

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

--------------------------------------------------------------------------------

Eitan Oppenhaim, Nova Measuring Instruments Ltd. - President & CEO [5]

--------------------------------------------------------------------------------

Thank you, Dror. With that, we will be pleased to take your questions. Operator?

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) We'll go first to Jaeson Schmidt at Lake Street.

--------------------------------------------------------------------------------

Jaeson Allen Min Schmidt, Lake Street Capital Markets, LLC, Research Division - Senior Research Analyst [2]

--------------------------------------------------------------------------------

Wondering if you could first comment on the linearity of order patterns in Q1. I recognize Chinese New Year can throw things off, but just curious overall big picture how linearity was in the quarter?

--------------------------------------------------------------------------------

Dror David, Nova Measuring Instruments Ltd. - CFO [3]

--------------------------------------------------------------------------------

So first of all, the first quarter just started. So we're just at the end of the first month of the quarter, but we do not see a major change in the order pattern between the flow in the last -- in the first quarter and the starting of the second quarter.

--------------------------------------------------------------------------------

Jaeson Allen Min Schmidt, Lake Street Capital Markets, LLC, Research Division - Senior Research Analyst [4]

--------------------------------------------------------------------------------

Okay. That's helpful. And wondering if you can provide any additional color surrounding the sequential decline in the service revenue line. And I guess, you had previously talked about service revenue growing in that 10% range in 2019. Has there been any change to those thoughts?

--------------------------------------------------------------------------------

Dror David, Nova Measuring Instruments Ltd. - CFO [5]

--------------------------------------------------------------------------------

No. In general, we are not changing our view on the service growth plans. The first quarter of the year is always a soft quarter for service revenue. And we do expect them to start growing starting the second quarter of 2019.

--------------------------------------------------------------------------------

Jaeson Allen Min Schmidt, Lake Street Capital Markets, LLC, Research Division - Senior Research Analyst [6]

--------------------------------------------------------------------------------

Okay. And the last one for me, and I'll jump back into queue. How should we think about CapEx for 2019?

--------------------------------------------------------------------------------

Dror David, Nova Measuring Instruments Ltd. - CFO [7]

--------------------------------------------------------------------------------

So as mentioned before, we are in the midst of transitioning the offices both in the U.S. and Israel, which requires more expensive, I would say, onetime investment in facilities. In the first quarter, the investment was around $2 million. You should expect an acceleration starting the second quarter, and we should conclude these projects by the end of 2019. And overall investment for these facilities should be around $20 million for the year.

--------------------------------------------------------------------------------

Operator [8]

--------------------------------------------------------------------------------

We'll move next to Quinn Bolton at Needham & Company.

--------------------------------------------------------------------------------

Quinn Bolton, Needham & Company, LLC, Research Division - Senior Analyst [9]

--------------------------------------------------------------------------------

Congratulations on the nice 1Q results. Obviously, we're going to soften a little bit sequentially in the second quarter, but wondering if you might be able to provide some thoughts on the second half. One of your competitors in the OCD space last night talked about seeing the second half of the year up 25% to 30% half-over-half, driven primarily by advanced logic and foundry. I think that's probably largely driven by TSMC's phase 2 of their N5 build out, and I know you have exposure there. Do you expect to see a strengthening in the second half as phase 2 is built out?

--------------------------------------------------------------------------------

Eitan Oppenhaim, Nova Measuring Instruments Ltd. - President & CEO [10]

--------------------------------------------------------------------------------

So, thank you for the question. So basically in good years and even in soft year, we don't guide beyond the next quarter. Specifically in this year, in order to be conservative and cautious because of the unclear visibility for the end of the year, I would like to be even more cautious because we have a volatile market. Regarding specifically to what we see in the second half, and as I said in my prepared remarks, it depends on 3 catalysts that, hopefully, will happen. One is the recovery in memory, which we see some sign for this recovery. It has to be recovered both in NAND and DRAM. And we believe that the price elasticity as well as the demand will start increasing somewhere in the second half. This is one. Second is the foundry and logic yield improvement that at the end will reflect on capacity expansion, which specifically in TSMC should be reflected in the second phase. But as we see that and according to their call as well, never announced, okay. We believe that if the yield of the 5 nanometer will continue to grow, probably some of the capacity of the phase 2 will happen in the fourth quarter, but we don't see it yet. The third issue is the rollout and the pace of our new products. So as I said in my prepared remarks, and as Dror said as well, we have multiple datas with our tools which represent large or very big ASP related to the product portfolio, and we expect initial revenues to come in the second half. So if these 3 catalysts will happen, we definitely will see uptick in the second half. From the current position that I have, in order to be very responsible, we take cautious approach and we don't guide beyond the quarter.

--------------------------------------------------------------------------------

Quinn Bolton, Needham & Company, LLC, Research Division - Senior Analyst [11]

--------------------------------------------------------------------------------

Understood, understood. Thank you for that color. Wondering if you might just sort of give us your thoughts on the China Foundry segment as you look through this year? Is it this year where you expect that business to be fairly soft? Or do you think you see -- or is there some activity in the local China foundry market that you're seeing?

--------------------------------------------------------------------------------

Eitan Oppenhaim, Nova Measuring Instruments Ltd. - President & CEO [12]

--------------------------------------------------------------------------------

On the contrary, when we look right now on the Chinese market, we look on the twist of the 2 segments. We definitely see some soft spending from the -- on the memory parts largely by the large VNAND provider. And when we look on the foundry, we look the 2 main foundries, SMIC and Huali, continue spending money. We see that in our revenue in the quarter, and we probably will see it in the next quarter. It doesn't mean that the whole China market will be greater than 2019, but definitely for this specific customer, both for 28 and 40 nanometer in part of them, we do see continuous investment.

--------------------------------------------------------------------------------

Quinn Bolton, Needham & Company, LLC, Research Division - Senior Analyst [13]

--------------------------------------------------------------------------------

Eitan, the last question just on the new -- the tuning tools. I believe one was already sampling by the end of the first quarter, with the second expected to go to eval by the end of the first half. Wondering has that second tool been shipped for evaluation or will that still happen this quarter.

--------------------------------------------------------------------------------

Eitan Oppenhaim, Nova Measuring Instruments Ltd. - President & CEO [14]

--------------------------------------------------------------------------------

So we actually expedite the betas in our customers. We have multiple tools now and not one. The 2 betas that we are talking about them, one technology is already rolled out to a beta in 2 customers and one of them in one large global customer. And all of them going according to the plan. And if everything is materialized, we supposed to see the initial revenues coming in the second half. So there's no change in the plan. On the contrary, we actually expedite that.

--------------------------------------------------------------------------------

Operator [15]

--------------------------------------------------------------------------------

(Operator Instructions) We'll go next to Patrick Ho at Stifel.

--------------------------------------------------------------------------------

J. Ho, Stifel, Nicolaus & Company, Incorporated, Research Division - MD of Technology Sector [16]

--------------------------------------------------------------------------------

Eitan, it's well known now that memory spending is quite muted at this time. But as you look forward both into the second half and 2020, maybe on a qualitative basis, which segment do you see a potential recovery occurring first, either in NAND or DRAM?

--------------------------------------------------------------------------------

Eitan Oppenhaim, Nova Measuring Instruments Ltd. - President & CEO [17]

--------------------------------------------------------------------------------

First when I am looking on the memory customers and the ability to spend, I do see the 2 large memory customers spending in China, okay, the global ones. And we're definitely starting to see orders coming from China for those 2 global memory customers. The question right now if it will be full capacity or only part of what they announced. We will see in the next couple of weeks, but we started to get orders. And I think that those 2 investments are on the way. Second, regarding the questions of DRAM and vertical NAND, we start -- when we're looking right now on those customers, we -- in the first phase, we see conversions and then we start to see new orders. So for the DRAM part, we started to see the conversion. So I feel that somewhere in Q2 or the beginning of the third quarter, we started -- we'll start to see orders for the DRAM. So regarding to your questions, I think the DRAM will come first.

--------------------------------------------------------------------------------

J. Ho, Stifel, Nicolaus & Company, Incorporated, Research Division - MD of Technology Sector [18]

--------------------------------------------------------------------------------

Great. That's very helpful. Maybe as my second question, in terms of some of the new products you've introduced, it sounds like they add a lot of value and enhancements to productivity and yield enhancements that customers are looking for. At the same time, a lot of time new products tend to have lower gross margins initially. Can you comment in terms of as these new products rollout the impact to your margin profile as well as your earnings leverage?

--------------------------------------------------------------------------------

Eitan Oppenhaim, Nova Measuring Instruments Ltd. - President & CEO [19]

--------------------------------------------------------------------------------

I want to start answering that by saying that Nova is not releasing news about productivity announcement, so you will not hear from us product X plus or product X productivity. The target in our product rollout is to bring new technology which is actually more interesting to the market and differentiating the portfolio that we are providing to the market. The productivity part is part of our business. We always provide it, and each one of the customers having a new fabrication site always ask for better productivity, and we have it on a yearly basis, but this is not the major investment that we have. The new technologies that are coming to the market is continuous approach that we have to our portfolio, which means we concentrate more in spending money for the materials market. And over there, we are going to bring a unique solution. And when we're looking right now on the dimensional parts, we always brought to the market a combination of hardware and software that gives very unique capabilities to measure application that cannot be measured today. Those are the specific criteria for rolling new technologies, and it's the same with the new products that we are bringing to the markets right now.

--------------------------------------------------------------------------------

Operator [20]

--------------------------------------------------------------------------------

We'll go next to Mark Miller at The Benchmark Company.

--------------------------------------------------------------------------------

Mark S. Miller, The Benchmark Company, LLC, Research Division - Research Analyst [21]

--------------------------------------------------------------------------------

Congratulations on your report. Just wondering in terms of X-ray, do you expect X-ray revenues to grow in the second half?

--------------------------------------------------------------------------------

Eitan Oppenhaim, Nova Measuring Instruments Ltd. - President & CEO [22]

--------------------------------------------------------------------------------

Again, Mark, we can't and we don't guide beyond the next quarter. I do think that if you're looking on the next couple of quarters and if you look right now on the previous couple of quarters, definitely the materials part as part of our overall revenue is growing. And I expect with what I said in my prepared remarks that the market is growing in this part, and materials engineering is becoming a unique issue. Even more important these days from the dimensional on OCD, definitely the X-ray or the materials capabilities will grow.

--------------------------------------------------------------------------------

Mark S. Miller, The Benchmark Company, LLC, Research Division - Research Analyst [23]

--------------------------------------------------------------------------------

Do X-ray orders or sales represent 10% or more of your backlog or your recent sales?

--------------------------------------------------------------------------------

Dror David, Nova Measuring Instruments Ltd. - CFO [24]

--------------------------------------------------------------------------------

Well, we don't disclose backlog information, but definitely X-ray revenues are much higher than 10% of the product revenue of the company.

--------------------------------------------------------------------------------

Mark S. Miller, The Benchmark Company, LLC, Research Division - Research Analyst [25]

--------------------------------------------------------------------------------

There seems to be some difference. From what you said today, you expect foundry and logic to remain strong in second half, but some people feel that after this quarter foundry and logic kind of tails off. But you're saying basically you're expecting stronger foundry and logic to continue in the second half, is that correct?

--------------------------------------------------------------------------------

Eitan Oppenhaim, Nova Measuring Instruments Ltd. - President & CEO [26]

--------------------------------------------------------------------------------

No. What I said is that all of us know that actually the one that are spending money right now on the logic and the foundry is Intel and TSMC. In each one of them, there is a different capacity expansion program that is taking place. One of them is the 10 nanometer and the expansion of the next generation. And the other one is the rollout of 5 nanometer and the next generation of 3 nanometer. So when we're looking right now on the second half, there is expectation that in both customers the rollout -- and again according to the yield improvement, the rollout pace will increase in the fourth quarter. If it's Intel in the proliferation and if it's TSMC for the phase 2, 5 nanometer that, again, I would like to say that was never announced, all right? So this is the 2 major catalysts, Mark. So when everybody is talking about logic and foundry, they're talking about -- mainly about those 2 inflection points that may occur in the second half and will trigger large capacity spending in logic.

--------------------------------------------------------------------------------

Mark S. Miller, The Benchmark Company, LLC, Research Division - Research Analyst [27]

--------------------------------------------------------------------------------

Do you expect to see much from Micron or Samsung because they've been reported, at least in memory area, to have very large inventories?

--------------------------------------------------------------------------------

Eitan Oppenhaim, Nova Measuring Instruments Ltd. - President & CEO [28]

--------------------------------------------------------------------------------

So I don't want to refer specific to customers, but we do see some movement in inventory reduction and orders in the leading memory customers.

--------------------------------------------------------------------------------

Operator [29]

--------------------------------------------------------------------------------

And that does conclude the question-and-answer session. At this time, I'd like to turn the conference back over to Eitan Oppenhaim, President and CEO, for closing remarks.

--------------------------------------------------------------------------------

Eitan Oppenhaim, Nova Measuring Instruments Ltd. - President & CEO [30]

--------------------------------------------------------------------------------

Thank you, operator. And thank you, all, for joining our call today. By that, we conclude our Q1 2019 Earning Conference Call. Thank you.

--------------------------------------------------------------------------------

Operator [31]

--------------------------------------------------------------------------------

Thank you. And that does conclude today's conference. Thank you for your participation.