CyberOptics Corporation
Q1 2017 Earnings Call Transcript

Published: 25 Apr 2017

[Operator:]

Good day and welcome to the CyberOptics First Quarter 2017 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Dr. Subodh Kulkarni. Please go ahead.

[Subodh Kulkarni:]

Thank you. Good afternoon and thanks for taking the time to participate in CyberOptics first quarter earnings conference call. Joining me is Jeff Bertelsen, our CFO and Chief Operating Officer, who will review our operating results and some details following my overview of our recent performance. We will then be available to answer your questions at the conclusion of our remarks. In keeping with Regulation FD, we have made forward-looking statements regarding our outlook in this afternoon's earnings release. These forward-looking statements reflect our outlook for future results which is subject to a number of risks that are discussed in our Form 10-K for the year ended December 31, 2016, and other filings with the Securities and Exchange Commission. We urge you to review these discussions of Risk Factors. Turning now to CyberOptics recent performance, our first quarter results which were consistent with our previously-issued guidance for this period, reflects the timing of orders and acceptances for our 3D MRS-enabled systems as well as the difficult comparison with last year's strong first quarter. First quarter sales totaled $11.9 million compared to $19.1 million in first quarter of 2016. Revenue in last year's first quarter was particularly strong driven by $2.5 million order of MX memory module inspection systems and a follow-on order of $4 million for SQ3000 3D MRS-enabled automated optical inspection or AOI systems and robust orders for legacy and 3D MRS-enabled sensors. We reported a net loss of $214,000 or $0.03 per share in the first quarter of 2017, compared to earnings of $2.3 million or $0.33 per diluted share in the earlier period. Order activity for our portfolio of SQ3000 3D AOI system products was solid in the first quarter and we're particularly encouraged by our growing pipeline of opportunities of large projects involving multiple SQ3000 systems. We believe some of these opportunities will generate significant revenues in the second quarter; as a result, we're reaffirming our previous guidance calling for second quarter sales of $16 million to $19 million. Our growing pipeline of SQ3000 opportunities is driven by the competitive advantages of CyberOptics disruptive 3D MRS technology platform, which is enabling the Company to capitalize upon the growing demand for high-precision inspection. For this reason, we believe we can drive CyberOptics percentage share of the rapidly growing worldwide 3D AOI market into the low double digits in 2017. The second quarter and full-year outlook for 3D MRS-enabled sensors is also promising. Sales generated by our long-term supply agreement with KLA-Tencor are expected to grow strongly as our 3D sensors are now becoming standard on KLA-Tencor back-end semiconductor inspection systems, utilizing 3D optical inspection. We're also optimistic about the second quarter outlook for our legacy 2D LaserAlign sensors for traditional OEM customers. Although, we continue to work with the consumer electronics company, we've no visibility as to whether or not a new order will be forthcoming. For this reason, we're not factored any orders from this customer into our second quarter and full-year 2017 for cash. As previously reported, we've made continued progress at advancing our MRS-enabled 3D sensor technology. Features of 50 microns, including devices with mirror-like finishes are being measured consistently in the research lab and progress has been made toward measuring sub-50 micron features. This progress is essential for making MRS-enabled 3D sensor technology applicable to mid-end semiconductor inspection within two years and front-end inspection within four years. If this initiative proves to be commercially viable, the available market opportunity for CyberOptics could be significant. First quarter sales of semiconductor products, primarily the WaferSense/ReticleSense product line rose 9% year-over-year. In response to customer demand, we're developing additional product offerings to address other applications in semiconductor fabs and flat panel display manufacturing. We anticipate strong future sales growth for our WaferSense/ReticleSense product portfolio. Based upon positive feedback from customer demonstrations and evaluations in such diverse areas as 3D printing, medical devices and cell phone components, we remain confident that our recently introduced CyberGage360 3D Scanning System should become an important contributor to CyberOptics’ long-term sales growth. Toward this end, we're continuing to strengthen our CyberGage sales channel and demonstrate the system at key industry tradeshows. Consistent with previous statements that potential customers are taking longer than initially anticipated to evaluate the functionality and benefits of this general metrology inspection system, no CyberGage sales were recorded in the first quarter. Given the length of the evaluation and sales cycle, we're forecasting nominal CyberGage sales in the second quarter and steadily increasing sales growth during the latter stages of 2017. Looking ahead, the majority of our first quarter-end backlog of $10.9 million is expected to ship in the second quarter, and we have a promising pipeline of sales prospects for our SQ3000 3D AOI products. As a result, we're forecasting sales of $16 million to $19 million and a strong earnings rebound for the second quarter of 2017. Moreover, we believe the phase momentum for our 3D MRS-enabled systems and sensors and suite of semiconductor products should continue building momentum towards the second half. For this reasons, we're optimistic that 2017 should be another year of solid growth and profitability. Thank you, now Jeff Bertelsen will review our first quarter operating results in greater detail.

[Jeff Bertelsen:]

Thanks. Subodh. To put a review of the sales performance of our product lines into context, it should be reiterated that our first quarter revenue reflects the timing of orders and acceptances for 3D MRS-enabled systems as well as the difficult comparison with last year's strong first quarter. But despite the first quarter softness that we forecasted previously, we believe 2017 will be another year of solid growth and profitability. Sales of inspection systems totaled 12.7 million in the first quarter down from 8.8 million in the first quarter the last year. The first quarter of 2016 included a large $4 million follow on order for SQ3000 3D AOI systems and 2.5 million of MX600 revenue. As Subodh noted, our order activity for our portfolio of 3D AOI system products was solid in the first quarter and we have a growing pipeline of opportunities for large projects involving multiple SQ3000 systems. As a result, we anticipate strongly improved system sales in this year's second quarter both year-over-year and sequentially. Sales of electronic assembly sensors totaled 3.9 million in the first quarter down from 6.2 million in the first quarter last year. Sales of both legacy and MRS sensors to our OEM partners were particularly strong in the first quarter of 2016. Order activity for 3D sensors is strengthening and we are optimistic about the second quarter outlook for legacy 2D sensors. Given these factors, we are forecasting strongly improved sensor sales in the second quarter of 2017 on a sequential quarterly basis although modestly below the level posted in the second quarter of 2016. Sales of semiconductor products primarily the WaferSense/ReticleSense product line totaled $2.3 million in the first quarter, up 9% from 2.1 million in the first quarter last year. The WaferSense/ReticleSense product line is forecasted to post strongly improved second quarter sales on a sequential basis with sales at or near the level recorded in the second quarter of 2016. Finally sales of 3D scanners and scanning services totaled $1 million in the first quarter, down from $2 million in the first quarter last year largely due to lower sales of X-ray systems. We anticipate that second quarter 2017 sales for 3D scanners and scanning services will be up significantly on a sequential basis, but still down on a year-over-year basis. The second quarter of 2016 included a large sale of X-ray systems to a single customer. Moving down to P&L, CyberOptics first quarter gross margin of 45% was up from 42% in the year earlier period, primarily reflecting a more favorable product and geographic sales mix. We believe that our gross margin percentage in the second quarter of 2017 will be at or slightly above the first quarter level. Operating expenses totaled $5.9 million in the first quarter compared to $5.7 million in the fourth quarter and $5.6 million in the first quarter of 2016. Higher SG&A expenses in the first quarter were mainly driven by CyberGage sales and marketing initiatives and additional field sales engineers that were hired across our product lines to help drive sales. SG&A expenses in the first quarter were slightly higher than originally anticipated due to the aforementioned additional hires and related recruitment fees CyberGage marketing cost and higher channel commissions reflecting the mix of first quarter sale. During the first quarter of 2017, depreciation and amortization expense totaled $550,000 and stock compensation expense totaled $188,000. We believe second quarter operating expense will be at or near the first quarter level. The $413,000 income tax benefit we have recorded in the first quarter of 2017 includes a $207,000 excess tax benefits from stock option exercises. Excluding excess tax benefits, the remaining income tax benefit in the quarter was booked at a 32% effective rate. Finally, cash and marketable securities totaled $23.2 million at March 31, 2017, compared to $25.9 million at year end 2016. The reduction in cash was due to payment of 2016 accrued incentive compensation and to support additional inventory needed for forecasted second quarter revenue and future CyberGage sale. Thank you. I'll now turn the call over the conference call operator who will poll you for any questions.

[Operator:]

[Operator Instructions] And we will take our first question from Ash Birla with Dougherty. Please go ahead.

[Ash Birla:]

So decent quarter, quick question. Can you, Jeff, can you describe the SG&A 3.97 million, how much of that portion is recruiting fees and audit fees in that just that is not recurring?

[Jeff Bertelsen:]

Ash, good question, so I would say the recruiting fees were about $50,000 where audit fees in the first quarter they would be roughly in the $100,000 range. As I mentioned, those costs are a little bit higher than what we had originally anticipated. I think we started some of the hopes earlier than what we had anticipated. We also spent some a little bit more money on some of the CyberGage sales and marketing initiatives.

[Ash Birla:]

Can you talk about CyberGage360 pipeline? One of the things is that you have talked about 100 customers, 25 major customers. Can you update us with that pipeline?

[Subodh Kulkarni:]

Sure, Ash, as you know we are assuring the unit and more tradeshows just about every week or every other week right now, so the pipeline continues to increase. Right now, we are looking at more than 200 customer leads that we are generally following and what we call the hot customer leads have increased over 30 right now. So, those are the ones that are likely to purchase system in the near future. So that increased with more tradeshows and so on.

[Ash Birla:]

And so obviously you haven't -- you said that you'll not recognize revenue, but can you at least provide how many CyberGage360 units you've shipped?

[Subodh Kulkarni:]

So, totally there're 15 units in the field right now, many of them in various different tradeshows in different parts of the world, some at least some at customers, right now. We've the ability -- we've 10 more units been build in different stages right now. So, we'll ship them out in the next few months here. And we obviously will ramp up depending on the actual orders. We think different but it's sufficient to do all the activities we're doing right now.

[Ash Birla:]

Okay. And then just one last one, just when you say solid growth is that 4% or 5% above GDP, what is -- can you just quantify that a little bit? And how are you guys planning to achieve that because that would mean second half will probably grow 30%, 40% over first half?

[Subodh Kulkarni:]

So, maybe I can take this question and Jeff will chime in more shortly. Our fundamental reason we believe we're going to have solid growth this year is because of the SQ product line. We've a very solid pipeline of opportunities and that I'll try to quantify the opportunities for you, that may give you a feel, so we've about 20 large projects all related primarily to SQ right now. And the total value of the project comes to as much as about $40 million right now. Now, not all of them and couple of them have started materializing already, but not all of them have started yet. And some of them may move out into 2018. So, it's never quite clear, but we believe a big fraction of that is going to materialize this year and that is going to be a primary growth driver for the Company. So because we had -- MX revenues will come down this year as you know, and maybe the CT revenues will come down, but those -- our negative offsets will be -- there will be offset and more than that offset by SQ pipeline right now, which we're getting at.

[Jeff Bertelsen:]

And so in addition to the SQ pipeline which is the bigger driver Ash, as we mentioned in the release today, we're expecting MRS revenues to ramp up here, as we become standard on the [ICOS] tool. So, that'll be a growth driver for us and we're expecting CyberGage sales to pick up in the latter half of the year. So, there're a number of drivers behind our second half growth in addition to WaferSense/ReticleSense which…

[Subodh Kulkarni:]

That will continue to grow.

[Jeff Bertelsen:]

Which will continue to grow. I guess the answer does the latter part of your question or maybe what's the first part of your question, I mean we haven't quantified our growth expectation for the full year. We haven't put a number on it other than just to say that we obviously do expect a strong second half and to have a good year here in 2017.

[Ash Birla:]

Just one last one, of the 11.9 million how much was the 3D MRS relative in revenue?

[Jeff Bertelsen:]

Sure, that was 2.3 million.

[Operator:]

And we'll take our next question from Jaeson Schmidt with Lake Street Capital Markets.

[Jaeson Schmidt:]

I just want to start with OpEx I know it sounds like you guys continue to build out the CyberGage sales channel and OpEx will remain relatively flat in Q2. How should we think about any potential ramp and continued build out of that channel in the second half?

[Jeff Bertelsen:]

I mean I think in the second half, we would expect us to see a little bit of OpEx ramp and that's really more tied to the revenue growth that we're seeing, and we do mainly sell through channel, so there'll be some third party commissions that would go with those sales. We did add a few field sales engineers here in the first quarter and those mainly were added to support sales in the latter half of the year, and we're not talking about a big number I mean it was a small handful of people. And we did spend more on CyberGage marketing here in the first half, in the back half of the year just the number of shows will go down. So, I think you know as we look in the back half, I would see a little bit of increase in the OpEx mainly just driven by the higher revenue levels, but not a big increase, not a big increase in the number of headcounts or that type of thing.

[Jaeson Schmidt:]

And can you help us try figuring out where you currently are in your ramp with KLA and when you think that will be fully ramped?

[Jeff Bertelsen:]

Sure, the equipment that they are shipping now, most of the new stuff that they're beginning to ship now is built in with our sensors today, but there are older platforms that they're trying to adapt us inside those. So, I'd say the other [halfly] in the ramp right now roughly speaking, and the ramp will be pretty much complete we believe by the end of this year. So, 2018 we expect to be on all their tools that need optical inspection.

[Jaeson Schmidt:]

Okay, and then last one from me and I'll jump back in the queue. Looking at gross margin, how should we think about the drivers there? Is it mainly just going to be revenue and mix?

[Jeff Bertelsen:]

Well, I think that the driver there will be the MRS products and the WaferSense/ReticleSense products. I mean those products tend to have higher gross margins and as we commented those will become a -- those become a bigger percentage of our overall revenue mix. We hope to see gross margins creep up here as time moves on and so we're looking for a little bit of gross margin improvement here in the second quarter.

[Subodh Kulkarni:]

But it's going to be a gradual move it's not going to be a quick jump off.

[Jeff Bertelsen:]

Exactly, it will be a kind of a slow gradual increase.

[Operator:]

[Operator Instructions] We'll take our next question from Greg Holme with Greg Holme Capital Group. Please go ahead.

[Greg Holme:]

I wanted to first piggyback on a previous question on the pipeline as it relates to the SQ3000. I think you've mentioned if I heard you right, 20 large projects as much as $40 million anyway to sort of compare that to where we were maybe a year ago or even last quarter just kind of curious how that pipeline is you know evolved here overtime?

[Subodh Kulkarni:]

Certainly compare to a year ago, Greg, the number is a lot bigger. I don’t know the exact number. We were involved in at this time last year, but it's nowhere close to 20 projects and $40 million type number, significantly smaller I would say at that time. I don’t know exactly what it was three months ago, but definitely smaller than what it is right now. Every month, we are securing more wins and then that number continues to increase, but it's hard to know exactly there about three months ago.

[Jeff Bertelsen:]

I was just going to add and I would tag onto that, I think our pipeline of opportunities is firming up to as we move forward. So, we are getting better visibility and that’s allowing us to quantify the opportunities better. So, some of the large projects that we were seeing a couple of months ago are materializing or getting better visibility.

[Greg Holme:]

And I guess sort of where I am going with it is what's -- if you put a number on unless it was maybe 10 million or 15 million a year ago. How much of that would you have realized overtime? So, I am trying to get a sense of that 40 million. How much do you expect to realize this year versus next versus loose? I mean I think you said something like a major fraction, but anyway to sort of quantify whether that’s half of the 40 or three fourth of it?

[Jeff Bertelsen:]

Sure. So, Greg, actually, it's not press release we have tried to -- actually, we have quantified a little bit and what we have said is, the total 3D AOI market this year is going to be about $150 million globally, and we expect to be low-double digit market share. So, that would just the math would say we would be close to $18 million to $19 million this year, somewhere in that neighborhood, okay. Now, certainly, if more projects materialize number will be higher and the assets will be lower. But last years for reference in 2016, we sold $8.1 million of SQ. So, we are expecting this Q2 more than double this year.

[Greg Holme:]

In terms of the pipeline, how many of these 20 large projects are with new customers versus previous customers? And is most of the activity still within consumer electronics or anything sort of outside that’s becoming more significant?

[Jeff Bertelsen:]

Broad based, there are three sets of customers if you think of it that way. There is the traditional SMT type customers like auto industry and just traditional electronics manufacturing, an increasing number of second category is semiconductor companies, we seem to be getting a lot of traction with the semiconductor companies. And the third and the interesting area we seem to be getting into is companies that are interested in measuring things using 3D automated optical inspection substance. And some of them are semiconductor somewhat SMT, but it's almost a different kind of applications and SQ because of the modest technology is really well suited to do sophisticated measurements in addition to inspections. So, I will say most of them are new customers. There is probably two or three I am looking at the list here in front of me who have bought things almost in the past, but most of them are new, many of them are Fortune 500 type companies, so very good quality customers to have long term. So, we feel very good about the overall pipeline and numbers, the size, and that's why we're so bullish about second half and our future.

[Greg Holme:]

One last one on systems just before we shift gears, on the memories, module side of things, any sort of update there, the one major customer last year, but anything new going on in that area?

[Subodh Kulkarni:]

Sure. So, the one customer who is nicely populated, most of them nicely populated. We do believe they may order a couple of more systems for maybe a $1 million or so sometime in the second half of this year, but that's uncertain right now. But the big opportunity, we're dealing with is one of their larger competitors. But there're large companies in the memory industry, we have one already with MX, so we're looking with another large one right now. And clearly, we understand that our system is far superior in performance compared to what they have today and they're going through the internal ROI justification whether to basically junk the systems that they bought three to four years ago and buy new MX MRS, continue to operate, being efficient systems. So that's their decision obviously, but we're pretty confident based on the fact that they're talking to us and they want us to do move the more devices and stuff like that that sometime in the next 12 months, we can say it'll be a 2017 project because these things take time. But sometime in the next 12 months, we do expect another large MX customer to sign up and some large orders to follow through after that, that's a big one. In addition, we're talking of two second tier companies like Kingston and PNY and those kind of companies who are interested in MX-type product. And one of the more interesting things we've done is we've enabled a 2D -- MX at the end of the day uses 2D AOI technology, and we've launched a product last year that we call QX250 which is also a 2D AOI technology, so same technology as MX, but it has a sensor on the top and sensor on the bottom. And effectively it is a lower cost version of MX for people who don't have significant automation in their factories, so it's very suitable for Tier 2 type of customers. So, there's a good chance that instead of buying a complicated MX system which is very good for high-end automated environment, they may choose multiple QX250s to meet their application. So it may get booked overall in the systems area, it may not just show up as MX we have reported as QX. But overall we feel very good about the whole memory industry opportunity and what we can do for inspection, certainly with 2D AOI like MX or QX as I said earlier, but even long-term for the 3D AOI and all the opportunities that memory industry brings to us.

[Greg Holme:]

Just switching gears here, that large consumer electronics customer who placed the pilot over last year, I think it was right around this time when you received that and I know you don't have perfect visibility. But assuming you do receive an order with your expectation piece that you'll get one here shortly or has something maybe changed in terms of the timeline shifting where that might sort of pushed out a little bit later than maybe what was initially done last year?

[Subodh Kulkarni:]

What we do know is that they're using our sensors that we gave them last year, as part of their manufacturing processes right now and collecting more data. So they like the technology, they like what the sensors are capable of doing. And frankly, I think they're -- based on the data, they're going to make their decisions in the next two weeks or two months, and it's just impossible for us to be in their position and know what exactly issues they're having in their manufacturing process and how many sensors that is going to need as far as we are concerned and that's why we chose to basically take it off -- take it out of our numbers for Q2 and the rest of the year. So, our guidance that we are providing does not include anything from that customer, if they obviously make a large order that's all additional to that.

[Greg Holme:]

Got it, okay. Last one from me, on CyberGage, just curious, any feedback since you made the improvement in the inspection accuracy. I just kind of wanted to know I guess if you're planning on making any additional changes to the hardware or software side of that or is it kind of finally at an optimal spot and now the challenge is kind of figuring out the best way to go-to-market with it and sell some of these things?

[Subodh Kulkarni:]

Certainly, the majority of the challenge right now is finding the right customer to the right application, so it's mostly sales and marketing. But having said that, we continue to improve the hardware and software, as you've touched on earlier and we have improved the accuracy that we did about three months ago. We came down from 25 micron accuracy that we started in October of last year to about 7 micron, accuracy, right now. But since then we have done some software changes and we introduced some soothing functions which make the images and the scans look visibly better. It doesn't quite change the measurement numbers, but it does make the image very visually appealing by suppressing some of the noisy data points. So we're doing some minor improvements as time goes along based on customer feedback and what we think is the right thing, are the right things to do. So we continue to improve but the majority of the challenge is sales and marketing right now.

[Operator:]

And we'll take our next question from Miles Jennings [ph]. Please go ahead.

[Unidentified Analyst:]

My question is regarding your APSRQ and I realize that this was introduced some time ago, but I can't thing to visualize what the trend in activity there is with these very large companies that would use in their lithographic scanning machine? Could you give us sort of the potential market there and where you stand as far as starting to capture some of that?

[Subodh Kulkarni:]

I'll do my best here. It is tough to call and you look at the size of the semi industry, all the numbers are very large as we're familiar, Miles. So, there are 170 to 180 active fabs worldwide right now. And on an average I would say each fab has 30 to 40 lithographic stations if you will, so you can multiply and then that would be the size and each lithographic station could use one APSRQ and one AMSRQ that kind of stuff. So you can multiply those numbers and average selling price for APSRQ and AMSRQ is roughly $45,000. So they add up fairly quickly in terms of market size. Having said that, I mean lithographic area is extremely sensitive to try and put it any foreigner object in that environment. So, we obviously have been selling APSRQ and now AMSRQ. Frankly AMSRQ seems to be getting traction than APSRQ from what we have seen so far, primarily because humidity is something, humidity measurement is something the lithographic customers seem to want to do, particles they definitely look at. But the systems are so clean that it's almost like an insurance check that they are looking in particle whereas humidity they actually want to measure. So within that AMSRQ fixed, we're getting better attraction than APSRQ. But both numbers are relative small compared to WaferSense. WaferSense dominates our current numbers right now. And this shows lithographic people may be more reluctant to inject new foreign things in their systems. That expensive system normally a lithographic system cost anywhere from $10s million to the latest UB systems cost of $130 million and $140 million of fees. I can only understand why lithographic engineers are really very reluctant to change anything or inject new foreign object in their system. Does that help?

[Unidentified Analyst:]

Yes, it does Thanks. I had just one further question. Sometime ago you introduced a new version of the SQ which was I think call the Ultra, it basically is the same as SQ3000 but perhaps it was really more accurate. And I just wondered in these large projects is some of that Ultra or is it all mostly the original SQ?

[Subodh Kulkarni:]

No, there is both I mean some of the large projects are definitely related to the Ultra. So, it's just we select -- we quantify a regular SQ that resolution is what we call substance micron, it's actually 9.9 micron. And Ultra high resolution, the resolution is 7 micron. So, it’s almost a 30% improvement over the regular SQ to re-resolution in 3D as you can imagine. And definitely some of the large projects that we touched on earlier the 20 or so projects are because of the ultra high resolution system that we have available now. But majority is still the regular SQ.

[Unidentified Analyst:]

Excellent, I find it very interesting that how you expressed your answer in terms of percentage going down from 9.9 micron truly that’s pretty amazing. Thanks very much.

[Operator:]

And we will take our next question from [indiscernible] with Western International Securities.

[Unidentified Analyst:]

I was curious any 10% customers in the quarter?

[Jeff Bertelsen:]

Just hang on for a sec -- there were -- yes, there was 110% customer in the quarter.

[Unidentified Analyst:]

And approximately what percent was that?

[Jeff Bertelsen:]

That percent roughly would be above 13%, 14%.

[Unidentified Analyst:]

A little bit clarity on the CyberGage360, you previously mentioned that there were 15 units of leads that were being shown around and another 10 that were in under construction? In the 10-K it was mentioned that I think only two units were sold last year and presently the press release there were zero units sold in the most previous quarter. Are those just demonstration units or they actually built for customers?

[Jeff Bertelsen:]

The 15 units those are really demonstration units, so they are used at tradeshows, they are used at customer sites, they're rotate around and they will spend time at different customer sites. But mainly for demonstration and evaluation right now there they certainly could be sold, if the customer has won and wants to keep, but we will sell that as well.

[Unidentified Analyst:]

And of the backlog of the 10.9 million backlog or is any of that related to the CyberGage360?

[Jeff Bertelsen:]

No, not right now.

[Unidentified Analyst:]

And how much of the backlog you'd mention that strong order activity for the SQ3000 during the quarter? How much of the backlog is related to the SQ3000?

[Jeff Bertelsen:]

So, the SQ3000 backlog is roughly about a $1.5 million.

[Operator:]

And it appears there are no further questions at this time, I'd like to turn the conference back over to Dr. Kulkarni for any additional or closing remarks.

[Subodh Kulkarni:]

So, thank you for your questions and interest in CyberOptics, we look forward to updating you with our Q2 results in July. Thank you.

[Operator:]

And once again that does conclude today's presentation. We thank you all for your participation. And you may now disconnect.