Q4 2023 Ichor Holdings Ltd Earnings Call

Participants

Claire McAdams; Investor Relations and Strategic Initiatives; Ichor Holdings Ltd

Jeffrey Anderson; Chief Executive Officer; Ichor Holdings Ltd

Greg Swyt; Chief Financial Officer; Ichor Holdings Ltd

Craig Ellis; Analyst; B. Riley Securities

Brian Chin; Analyst; Stifel Nicolaus and Company, Incorporated

Charles Shi; Analyst; Needham & Company Inc.

Robert Mertens; Analyst; TD Cowen

David Duley; Analyst; Steelhead Securities

Presentation

Operator

Good day, ladies and gentlemen, and welcome to iCore first fourth quarter 2023 earnings conference call. At this time, all participants are on a listen-only mode. Later, we will conduct a question and answer session and instructions will be given at that time. At this time, all participants are on a listen only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. I would now like to turn the conference over to your host, Claire McAdams, Investor Relations for Icoria. Please go ahead.

Claire McAdams

Thank you, operator.
Good afternoon, and thank you for joining today's fourth quarter 2023 conference call. As you read our earnings press release and as you listen to this conference call, please recognize that both contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control and which could cause actual results to differ materially from such statements. These risks and uncertainties include those spelled out in our earnings press release, those described in our annual report on Form 10-K for fiscal 2022 and those described in subsequent filings with the SEC. You should consider all forward-looking statements in light of those and other risks and uncertainties. Additionally, we will be providing certain non-GAAP financial measures during this conference call. Our earnings press release and the financial supplement posted to our IR website. Each provide a reconciliation of these non-GAAP financial measures to their most comparable GAAP financial measures.
On the call with me today are Jeff Andreson, our CEO, and Greg White, our CFO. Jeff will begin with an update on our business, and then Greg will provide additional details about our results and guidance. After the prepared remarks, we will open the line for questions.
I'll now turn over the call to Jeff Andreson. Jeff?

Jeffrey Anderson

Thank you, Claire, and welcome to our Q4 earnings call. Our fourth quarter revenues came in at the upper end of our expectations at $203 million. This equates to sequential growth of 3% from Q3 within an otherwise stable demand environment.
I'd like to provide some color on our revenue movements within the fourth quarter first, the majority of the upside in revenue growth above the midpoint of guidance was essentially pass-through. This is because during the quarter we elected to take the opportunity to reduce inventory levels in order to drive strong free cash flow generation, which in turn was used to reduce our debt levels and ongoing interest expenses. We sold the inventory at zero margin and so while this decision carries a number of benefits for our ongoing financial performance, it did have a negative impact on our Q4 gross margin. Further, our Q4 revenue forecast had incorporated expectations of improved mix compared to Q3, but instead, our revenue mix actually became less favorable. And this had the largest impact on our lower than expected gross margin. Our build-to-print gas panel business, which is our lowest margin business improved during the quarter to drive both the remaining upside to revenue as well as offset the decrease in our weldment business as our customers continue to focus on reducing inventory levels. While this unfavorable mix shift did have an impact on our gross margin, strength in the gas panel segment of the business is a very good indicator that we are coming off the bottom of the cycle. So in total, we witnessed a temporary low in gross margin performance in Q4 through a combination of unfavorable product and customer mix, the impact of inventory sales and costs, and to a lesser degree, continued E&O headwinds and slightly higher manufacturing costs with OpEx just below the midpoint of guidance operating profit was roughly breakeven. Interest expense came down quarter over quarter, given our decision to deploy free cash flow towards reducing our debt levels. During Q4, we generated $35 million in free cash flow and reduced our debt levels by $32 million, while still adding $4 million to our cash balance. Given the lower profit versus forecast with the slightly lower OpEx and interest expense and a higher net tax benefit. The net loss per share was $0.06.
Now I'll turn to our outlook. There are many reasons to be optimistic about the growth ahead.
First, we estimate that our exposure to memory WFE declining suggests about 25% in 2023, which means we are well positioned to outperform industry growth as memory spending improves, in particular within the A. segment.
Next, as our memory exposure has declined over the last few years, we have increased our exposure to a number of growing market segments of WFE, such as EUV lithography and MP gas panels for silicon carbide. As a result of our leadership in providing gas delivery for the EUV market, we added ASML has a third 10% customer for fiscal 2023. We anticipate that our EUV sales will continue to expand in line with unit shipment growth in the years to come. We are also pursuing opportunities to expand our exposure to the overall lithography market and believe we are well positioned to benefit from next-generation platforms such as high NA as well as win share in additional areas of lithography. We continue to ship production volume, gas panels for the silicon carbide market and have been qualified on the next-generation MP systems. Our design wins for FB. applications resulted in strong growth from our fourth largest customer in 2023. And as the applications and market opportunities continue to grow in support of EUV manufacturing in the years to come. We anticipate our silicon carbide exposure will continue to be a tailwind to our revenue growth. We estimate the silicon carbide market for gas deliveries to be around $60 million in 2023 and expect it to double in the next three to four years. We are also seeing the emergence of new technology drivers and process inflections that require an increasing use of applications that are more highly dependent on the accuracy and repeatability of the cash delivery system. These include the growing use of certain etch and deposition techniques within advanced logic architectures, 3D D-Ram in advanced packaging. We recently refreshed our investor presentation to reflect the increased use of certain of these growing applications such as selective HKLD. if silicon ends and more, we have a role providing fluid delivery to all of these applications. As EUV adoption continues to proliferate across multiple device types. Our process tool customers are witnessing the need for more etch and deposition steps to help create smooth patterns and reduce line with restaurants. Additionally, the growing importance of advanced packaging has revealed process challenges that require better film stress management, improved defectivity, enhanced uniformity, increased material selectivity, all of which are enabled by more precise control of gas and fluid delivery outside of semiconductors, specifically for IMG. business. We are also driving cross-selling opportunities at our historical gas panel customers as well as opportunities to offer high course components and capabilities to AMG's customer base in medical, aerospace and defense. Because these new technologies and drivers evolve and proliferate, we see opportunities for iCore to expand our revenue potential and continue to add breadth and diversification to our customer base. All of these factors build a strong story for Acorn's revenue growth as the industry recovery accelerates, but it's our proprietary products, including our next-generation gas panel that we are most excited about as our key initiative to drive overall gross margin expansion within our business, we have been qualified on three applications and are now supporting our customers' evaluation tools that are shipping to a device manufacturer. Our latest investor presentation includes a slight adjustment to our target model to reflect the higher level of investments we are making in R&D in order to develop additional proprietary products, which we believe in turn can drive our gross margin north of 20%. We are focused on the development of proprietary products that support our customers' long-term technology roadmaps. These periods of lower demand provide both Tyco and our customers, the ability to work on new qualifications, we continue to make very good progress in our key focus areas. These include our next-generation gas panel and qualifications of our proprietary machine components. I'm very pleased with the progress of our new gas panel as we are now moving into qualifications at the device manufacturers. We continue to work with multiple customers and expect to add additional customer evaluations over the course of 2020 for our new gas panel contains about 75% proprietary high core content compared to around 10% today, which will drive significant expansion of our gross margin profile in the next several months, we expect to ship gas panels that will support five additional systems for end user customer tool evaluations. This is a major milestone for the program. Our best estimate of when production systems will begin late 2024 and our proprietary machine components, we continue to win new qualifications across our customer base. The ramp is taking longer as we work through the inventory on hand, but we are qualified and expect this to positively impact our first quarter gross margin and continue over the course of the year.
In summary, I remind everyone here today that our revenues tend to recover more sharply when industry spending rebounds. Furthermore, our business model and financial profile tend to generate significant operating leverage as revenues grow. Current industry expectations are that the business environment for WFE will persist at these levels through the first half of 2024. And given the modest mid single digit growth outlook for the full year 2024 WFE will likely be more weighted towards the second half given our current visibility, we also expect our revenue run rate to continue around the $200 million level through the first half, followed by the beginning of a revenue ramp in the second half. As we look ahead to an expected strong recovery year in 2025, we look forward to ramping revenues back towards the $250 million to $300 million plus level in 2025, we expect to be able to deliver significant earnings growth as revenue volumes increase, which is why we continue to make critical investments in our business in support of future growth.
With that, I'll turn it over to Greg to recap our Q4 results and provide further details around our Q1 financial outlook. Greg?

Greg Swyt

Thanks, Jeff. To begin, I would like to emphasize that the P&L metrics discussed today are non-GAAP measures. These measures exclude the impact of share-based compensation expense, amortization of acquired intangible assets, nonrecurring charges and discrete tax items and adjustments. There is a useful financial supplement available on the Investors section of our website that summarizes our GAAP and non-GAAP financial results as well as a summary of the balance sheet and cash flow information for the last several quarters. In the fourth quarter, our revenues were $203 million at the upper end of guidance and up 3% from the prior quarter, with customer demand remaining remaining relatively stable from Q3 levels. The majority of upside in revenues compared to the midpoint of guidance reflected pass through inventory sales at zero margin. As Jeff discussed, with the less favorable product and customer mix, the impact of the sale of our inventory at no margin and some continued E&O and slightly higher manufacturing cost headwinds. Our gross margin was 10.4%, which was well below our expectations. We anticipate a significant improvement in margins as we move through 2024.
Q4 operating expenses were slightly lower than Q3 at $21.2 million, and our operating income for Q4 was roughly breakeven. Our net interest expense was $4.7 million, and our non-GAAP net income tax benefit exceeded our forecast at $2.8 million The resulting net loss per share was $0.06.
Now turning to the balance sheet, at the end of the quarter, our cash and equivalents totaled $80 million, a $4 million increase from Q3. We generated $37.6 million in cash flow from operations. And after deducting 2.3 million of capital expenditures, our free cash flow was $35.3 million. Free cash flow for the quarter was particularly strong given the $37 million sequential decrease in accounts receivable, which drove DSOs to only 30 days inventory decreased $21 million during the quarter to end the year at $246 million and inventory turns increased to 2.8. During the quarter, we paid down $31.2 million of debt, and our net debt coverage ratio currently stands at 3.4 time.
Now let's discuss our guidance for the first quarter of 2024, with anticipated revenues in the range of $190 million to $210 million. We expect our Q1 gross margins will improve to a range of 13% to 13.5%. At this time, we expect Q1 operating expenses to be approximately $22.3 million. The increase reflects the seasonal impact of payroll taxes, resetting audit fees and other variable compensation costs. As we move beyond Q1, we expect OpEx to remain at a similar level as we are making targeted investments in IT and R&D. Netiq's net interest expense for Q1 is expected to be approximately $4.3 million.
Looking beyond Q1, we expect our net interest expense to continue to decline as a result of our focused efforts on reducing our debt levels as well as an anticipated favorable reduction in our interest rate later in 2024. For modeling purposes, you should model interest expense for 2024 to be approximately $16 million. We do not expect to record a tax expense or benefit for Q1 for the full year, we are forecasting a non-GAAP effective tax rate of 5%.
Operator, we are ready to take questions. Please open the line.

Question and Answer Session

Operator

Thank you. At this time we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two, if you'd like to remove your question from the queue For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please. While we poll for questions. Our first question comes from Craig Ellis with B. Riley Securities. Please proceed with your question.

Craig Ellis

Thanks for taking the question and thanks for all that color, guys. I wanted to start off just by clarifying the gross margin line item in the fourth quarter and then understanding how those dynamics played out through 2024.
So great. Can you just quantify the specific factors that were at play that caused gross margin to decrease so significantly. And then just help us understand the arc of those of how those come out of the model as we look through 2024 things, I think, Craig, it's Jeff pickup like for like Greg came in at the back end.

Greg Swyt

But I think given the magnitude of the miss. I think I like to kind of walk you through it. I think that first of all, you know, we elected to sell some inventory costs. And as we looked at our inventory and months of supply, we had some inventory that we were able to go ahead and sell. Have we built that. That piece would have generated about $1 million of kind of incremental profit off the bottom. And so as that side of our business, really the depth of the component side has been down. This quarter's mix was primarily kind of a much lower level of weldments and we had seen before. So that mix offset by the gas panel mix was the largest driver. So as we look forward, I think in the gross margin that we've talked about, we see the mix staying relatively stable and coming out of this. And as you kind of look into next year, all of the key initiatives that we've been driving around internal supply and developing new products that we can integrate into our gas panels are going to help us recover some of this stuff. We also will see some normalization of some of the inventory reserves that have been bigger than we've seen in that in the past as well.
And what I would like to you guys to leave with. And I'm sure this question will come up again is is as we kind of recover to $225 million or higher, which is what we maybe see late in the fourth quarter or around the fourth quarter as kind of our outlook at this time, we think we can get it back up to around 17% so from 13 to 17, you're going to see increases as we kind of go through the calendar year of data at it.

Craig Ellis

And I have a question yesterday and then I wanted to follow up on your comments on the new gas panel product and like the fact that you've got that much higher content there, and that's going to be a gross margin tailwind, chip as you start to ship that later this year. Can you just help us understand how the mix of that newer product will feather in with all the existing product. That's part of current customer programs right now. Said differently, how abruptly can Kevin, that ramp to significant majority of gas panel mix?

Greg Swyt

Yes, I think another good question. And you know, as we're working through these qualifications, the first three applications that we won or essentially how Poland market share gains are there applications we haven't had before and can going forward so as we kind of look later in the year, I would say this year, we're probably going to see kind of low single digits of revenue start to happen. It's really in 2025 as these qualifications start to layer on and get qualified at multiple customers, that will start to see the inflection.
Having said that, Craig, a lot of the internal components that are in the gas panel. It's fully configured with about 75% of our content. We can work on the I'll call it the legacy gas panels, the gas panels today, there's a lot of components we can still get qualified on. There's valves, fittings, substrates, things like that that are adding content. And that's that's the internal supply that Aarohi I referred to. So it's going to start to happen during the year. We've already won the qualifications. They're moving a little slower because of kind of our inventory position and some of our on-order position, but there's we're going to see that as a piece that helps us in Q1 specifically and going forward. And those are measured in kind of tens of millions of dollars to. So you'll see those first before we get to the fully integrated gas panels affect our gross margin in 2024.

Craig Ellis

Got it. That's helpful color.
Guys. I'll hop back in the queue.

Jeffrey Anderson

Thanks, Greg.

Operator

Our next question is from Brian Chin with Stifel. Please proceed with your question either.

Brian Chin

Good afternoon.
Thanks for letting us ask a few questions on that. Maybe first, just to kind of go back to the gross margin, just maybe to lay things out maybe a little bit, we'll get a little clarity here on it. If we are modeling say like 14% for Q4 and the non-GAAP is 10.4, if the revenue upside was kind of zeroed out gross margin, that's still only maybe like 30 basis points. And so there's still several hundred basis points there that kind of understand. Is there a way you can reconcile sort of your higher inventory reserves worse mix and other elements there that kind of.

Jeffrey Anderson

Yes, get us to the delta. Yes, I think when you look at the mix and its product and customer mix, I would say that was probably somewhere around two thirds of the challenge, obviously, the gas panel business to build to print, as I said on the prepared remarks, our lowest margin versus our higher margin products that down the mix didn't change. We didn't achieve the mix we set out at the beginning of the quarter. So the pass through think of that as kind of 50 basis points. And I think I did the math right. And then the other kind of headwinds between 13% and 14% where we where we ended last quarter and where we wanted to be this quarter is really a little bit higher E&O than we expected, but really the slower ramp of some of the internal supply parts, which will recover again in Q1.
So I think that adds enough granularity and color 4K is it doesn't maybe is that kind of an add-on to that. But also my second question on in terms of the rationale for kind of doing that pass through, was that is this sort of a prioritization of cash flow or over P and L for the for that given quarter. That's kind of the default of that. But then kind of tied into that on that when I look at your customers' balance sheet and you can definitely see their inventory is moving in the right direction. Yes, they still have maybe two quarters, two quarters plus worth of inventory, but when you drill down into what the excesses of your products, either gas panels, the finished goods and machine components and raw materials inventory, how severe is that excess? And is that part of what gives you confidence that this destock will basically do be over in first half?
Yes, good question. I think you've got a couple of parts. So first that this decision that we made, specifically, it was around parts where we saw the usage The months of on hand to be well out beyond a year. And so we took advantage of that to generate cash down this and it and it did have a P&L hit, we would have had to wait a while before we could consume that. So that was a little bit around time value of money and and our ability to pay down some debt and the fact that it would have taken us a while. So the second part of your question is really around what's our confidence that we'll be through kind of our customers burn down. I think it obviously varies by I'll call it kind of business segment within ours. I think in general gas panels that they're done, right like most of this is going to be in the weldments and machine components side. I think it will carry to some degree towards through through even this year our inventories are two way, we're about half our peak year inventory turns. So we're clearly carrying excess inventory that we're looking forward to ensure that we can burn it down. So we see a path for how we get back to more normalized turns. But it may take just a little bit beyond the end of this year to get there.

Brian Chin

Okay. Thanks, Justin.

Jeffrey Anderson

Thanks.

Operator

Our next question is from Charles Shi with Needham & Company. Please proceed with your question.

Charles Shi

Yes, thanks. Jan. First of all, congratulations on winning the Applied Materials Supplier Award. And I have a question, Jeff, about the '24 revenue progression, the way you kind of described almost feel like you're going to be run rating around $200 million for two quarters. I mean until June and December, you think you can approach that $250 million. That's a quite a bit of a step up. Are you expecting September to be somewhere in between because the reason why I ask this is your one for your two largest customers, Lam Research recently talked about more of a moderate I mean a modest actually in either a modest recovery, but that but the actual a little bit stronger close to the year. I almost feel like the Q. three, they are expecting not so much of an uptick are you seeing a little bit of the earlier uptick in Q three, and I mean, it's kind of embedded in the way it has crept up a year and color for that yes, yes, yes.

Jeffrey Anderson

Let me it's a good it's a good question, Charles, because maybe my second, my comments during her at the beginning, we talked about specifically, we're looking forward to getting back to those kind of two, 53 hundred millions is really looking into 2025.
Q4. I don't think is going to get to to 50 just to be clear that wasn't the intent of what I was trying to get across. I think it's going to be a little in that kind of 25 to 30 range, maybe is our visibility today and in Q three will be somewhere in between. And keep in mind that we have we're still because we're still kind of working through the inventory reduction. We're going to see a different profile as those are longer lead time parts. So those will kind of lead any kind of gas panel and in further kind of growth. But again, I think 2025, I think the confidence with us and with our customers is that's going to be a pretty a pretty good growth year. So I would expect that some of that has to occur in the back half of our year to support the beginning of their years and their revenue. So I hope that kind of helps you kind of position where we kind of see are year ago.

Charles Shi

Got it. Thanks, Jeff. That's great color.
Maybe the other the other question I have would be, I mean, amount, I mean, between the two largest customers, I think at the prior prior person ahead of me ask about Lam Research still carrying good amount of inventory on Applied Materials. It looks like their inventory level seems to be relatively.

Jeffrey Anderson

Okay.

Charles Shi

And do you see a differential in terms of your revenue coming from Lam versus applied that this year? Is your revenue to apply the slightly better than them or the reason why I asked the business. I really just wanted to figure out and where the upside of your your revenue from the two largest customers could go is more likely to come from, which from which customer?

Jeffrey Anderson

Thanks. Good question. Probably some specific can't specifically answer at a customer level, but certainly our two, our two largest customers had different profiles. And I would say largely around where they were positioned primarily in the memory market. I mean, we do know our largest customer at a very, very high level of market share in the three demand. That recovery is something when that comes back, then you will actually probably see that side of our business accelerate faster than foundry logic having said that, you know, foundry logic, we view and as remaining fairly strong into next year, we don't see a massive drop-off in China shipments, and we're not getting any of those signals from our customer base as well. So And beyond that, I don't I don't want to get too specific around customer profiles. It's Jeff.

Charles Shi

That's that's fair.

Jeffrey Anderson

Thanks. Thanks, Charles.

Operator

Our next question comes from the line of Krish Sankar with TT Cowen and Company. Please proceed with your question.

Robert Mertens

This is Robert Mertens on the line on behalf of Krish. Thanks for taking my questions. And I guess just the first one is if you had any additional color on mix on the expectations for the component business this year?

Jeffrey Anderson

I know inventory levels, it seems to be a headwind, but if you and any change over the last few months and then on top of that, just sort of what the tailwinds from design wins ramping, but look like this year or if that's more of a calendar '25 story and good question, maybe the way I would answer the component side of our business is a we're seeing very similar outlooks quarter over quarter in the first half for machining. We would expect that starts to go. Weldments will probably run a little longer. They have I think a higher level of inventory in there and the value chain going forward are kind of the totality of our components business. If you kind of went back to the '21 timeframe, '22, somewhere in there probably ran somewhere between 20% and 25% of our business, maybe a little closer to 25%. It's kind of run in kind of mid to high single digits today. So that's the gap in the mix that we need to recover. And that will help us accelerate towards our ultimate goal, which is to get our gross margin up around 20%, but that probably will occur in 2025 as we kind of compound our new our new design wins and the gas panel 2.0, the recovery of our component mix. Now you're at the other part of the question is, you know, how do we kind of size some of the wins we've already had. And I would probably just say it's kind of tens of millions of dollars of wins, and we expect a pretty significant uptake of those. And it's going to help us continue to drive our gross margin back to that 17% when we get kind of north of '25 by the fourth quarter.

Robert Mertens

Got it. That's helpful. And then maybe just one more note up through the next-gen gas panel. If I just want to make sure I heard correctly, and with those evaluation systems and shipments, you were thinking maybe a low single digit millions in the later half of this year and then the more material our revenues would be next year.

Jeffrey Anderson

Did I hear that correct?

Robert Mertens

You did hear that correct.

Jeffrey Anderson

I mean, anything we're qualified in with success at customers, how fast they move it. The market starts to accelerate. Obviously, that number will improve, I would imagine.

Robert Mertens

Got it. Thank you. That's very helpful. That's all for me.

Jeffrey Anderson

Thanks, Rob.

Operator

Our next question is from David Duley with Steelhead Securities. Please proceed with your question.

David Duley

Yes, taking my question, I was wondering if you could elaborate just a little bit more on your silicon carbide opportunity. I think you have one customer now and is there possibility to sign up new customers in the next few quarters? And but are there other opportunities for you guys outside of LP in silicon carbide?

Jeffrey Anderson

Thanks, Dave. Good question. So the answer is yes, I think there's still opportunity for us in the deposition side of call, it might not be an MP like saying that there are other companies out there doing other other processes that we've had some initial discussions with very early stage. I think the bigger opportunity is around the implant side of the business and those discussions are ongoing. And I would say we in particular, we've run a little bit of weldment business, pretty small, but it's a foot in the door, one of the implant suppliers, and we're going to continue to drive that. And I think that's kind of where we would probably see kind of an inflection point beyond our initial customer that's doing the IP silicon carbide.

David Duley

Do you think you can win further at the customers because there's like, I think, four or five of those guys.

Jeffrey Anderson

Well, I mean, I think there's kind of three in total that we're kind of looking at and the answer is it's probably this year. If we started, we're just starting the discussions late last year. We haven't really done any evaluations or gotten deep enough. So it's not out of the question but it's probably a 2025, you know, revenue driver versus 2020 for 2024 would have to be similar to our new gas box stuff. It's the beginning of the conversations of what we can do. And when when we talk to our customers, they obviously see the breadth of what we can do as a company from gas panels weldments machining and we can manage a lot of their supply chain. And I think that's how we, in essence quickly won the first application, which is now kind of multiple generations of tools moving forward with our initial customer.

David Duley

I think you know, I guess the other question I had is you talked about a second half ramp in your core business. Are those are your large OEM customers coming in and talking to you about getting ready for this ramp? Or are they just the typical? I'm just wondering if there's a little bit more than rolling forecast behind the excitement about the second half,

Jeffrey Anderson

I would say it's maybe less about the rolling forecasts and more about the conversations we're having in preparation of the growth that they see kind of coming out of Q4 and into 2025. So I think it's a very consistent message out of our top four customers. So they're telling you to get ready for a ramp in the back half?

David Duley

Yes. Thank you.

Jeffrey Anderson

Thanks, Dave.

Operator

We have reached the end of the question and answer session. I'd now like to turn the call back over to Jeff Andriessen for closing comments.

Jeffrey Anderson

Thank you, Charles. Kind of noted today, we have we won an award from Applied Materials for a supplier excellence award and in quality for 2023. This is quite an honor to be recognized by the company and the contributions we've made to our customer over the past year. And looking forward to future years. So it's always great to see these awards occur. I want to really thank everybody for joining us on this call this quarter. I'd like to thank our employees our suppliers, our customers, our shareholders for their ongoing dedication and support as we continue to navigate this highly dynamic business environment. We look forward to updating you again on our Q1 earnings call scheduled for early May as operator. That concludes our call.