ichor holdings, ltd. (ichr) ceo tom rohrs on q4 2018 results - earnings call transcript
Eco Holdings Limited(NASDAQ:ICHR) At 4: 30 p. m. on February 6, 2019, claire McAdams-2018 the results of the conference callIRTom Rohrs - Chairman and CEO Andreson Participants Ho- Sidney Ho Bolton-Deutsche Bank Carl Ackerman David Durley, Inc. Ladies and gentlemen, welcome to the 2018 Earnings Conference Call for Ichor Systems in the fourth quarter. At this time, all the participants were listening. only mode. We will have a question later-and- The answer link and instructions will be held at that time. [ Operation instructions] Remind me that today\'s program is being recorded. I would now like to introduce the investor relations of Claire McAdams, the host of Today\'s meeting. Please continue. Thank you, Jonathan. Good afternoon, thank you for attending today\'s conference call, we will have a replay on Ichor\'s website shortly after the end of this afternoon. When you read our earnings press release and listen to this conference call, please recognize that both contain forwarding- A statement in the sense of federal securities law. These forward- Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control and may result in significant differences in actual results from such statements. These risks and uncertainties include the risks and uncertainties set out in our earnings press release, as well as the risks and uncertainties we describe in our annual report in table 10 K. the 2017 fiscal year document submitted to the SEC and the document described in the document subsequently submitted to the SEC. You should consider all the progress. Look at the statements based on these and other risks and uncertainties. In addition, we will provide some During this call, the GAAP financial indicators and our earnings press release contain these non- Based on the most comparable GAAP financial measures. Today, I received a call from Tom Rohrs, Chairman and CEO of Ichor; Jeff Andreessen, our chief financial officer. Tom will start with a review of the business and then Jeff will have a full review in the fourth quarter The annual financial situation and our outlook for 2019. After the ready lecture, we began to ask questions. I\'m transferring the call to Tom Rohrs now. Tom? Thank you, Claire. Welcome to our conference call for the fourth quarter. For Ichor and the industry as a whole, the fourth quarter is a challenging quarter. We see lower than expected demand and construction plans as our customers are very serious about protecting their inventory status. The demand environment this weekend has led to our income and income being lower than the guidance of this quarter. Despite the weak semi-equipment, we were able to generate $31 million in free cash flow this quarter. Looking full-year. 2018 is the strongest year in Ichor\'s history. Annual income of $0. 824 billion, up 26% year on yearover-year. This reflects an increase of about 9% in our gas and chemical delivery core market, surpassing the growth of the entire industry. However, our welding and precision processing business has also increased significantly. We have achieved the goal of further improving gross profit margin and operating profit margin --over- Both indicators hit a new record this year, earning about $3 a share. Over the past four years, we have achieved an annual growth rate of 35%, which is unmatched among our peers and industry customers. Our earnings per share grew by 57% per year. In 2018, our profits and cash flow reached the highest level in history. Our net income is $75 million, generating more than $60 million in revenue. ph] Operating cash flow. We also returned $90 million to shareholders through stock buybacks. The most important achievement in 2018 may be that we show strong profits and cash flow at the business level, well below the highest spending environment in the first half of the year. I feel that as we have implemented a proper scale plan at the end of June, we have done a great job in adapting to a weak business environment. We did the same thing in the third quarter because we saw a decline in demand in the fourth quarter. We are a little caught off guard with the inventory correction level in the second half of the year, but since then, we have implemented another round of correct adjustments, and I believe we have the right resource balance at the current business level. Due to our variable manufacturing cost structure and decisive actions to respond to changes in demand, our operating model remains good. We are still confident that this time more Industry spending slowed in the quarter. As the industry recovers, we will be able to demonstrate our financial and operational leverage. Now, I would like to take some time to discuss what we have seen in q1. Our revenue for the first quarter will be flat with the fourth quarter, down 7%, which shows that we are better off than many of our peers and customer semiconductor businesses. We believe this is partly due to the fact that our market share is starting to rise. This also means that in the second half of 2018, the inventory correction that primarily affects our component business should lag behind us when we exit q1. We believe that our natural gas and chemicals delivery business is once again closely related to our customers\' construction plans. During this period, our current position is to achieve steady profitability at today\'s business level, while ensuring that we can respond quickly when demand increases, we currently expect this to happen in the second half of 2019. We will continue to make contingency plans for any additional weakness we may experience, but I believe that as we bounce along the bottom, the main part of the downward correction has passed. While there are good reasons to be cautious, we also have some noteworthy post-recovery winds in the second half of the year. These include our incremental market share growth, which will make an increasing contribution to our gains and losses over the course of our year, as well as our exposure to ASML, this led to a 50% increase in sales in the second half of the year. In addition to these factors, we expect that we can begin to see the replenishment of our component business inventory in preparation for increased demand for etching and deposition process tools. We will continue to carry out our plan in order to gain a greater market share. When we entered the fourth quarter, industry analysts expected that fab equipment would be reduced by about 5% in 2019, and we estimated that our incremental revenue opportunities would be about $100 million. Given that it is clear at this point that the industry will see a bigger correction, for process tools it is likely to drop by 20% this year, and our chances may be 20 million to 25 million dollars less than a year ago. - Or sorry, a quarter ago. Nevertheless, the growth of these market shares remains a very important growth driver for Ichor to once again surpass the spending of the entire industry. Share growth will be achieved in welding, precision machining, chemical delivery and gas delivery systems. I continue to be very pleased with the progress we have made in the face of these organic opportunities. I will update you on this progress, starting with the first meaningful incremental market share revenue starting in the first quarter. In our welding business, we have qualified on the first and second wave parts with a new customer and are in progress for the third time. These qualification stages account for nearly half of what we are pursuing this year. We have the ability to support this opportunity because we have taken advantage of the capabilities we have acquired through Cal Weld collection. In our precision processing business, the cycle time of qualification examination is slightly longer than the cycle time we experienced in the welding business. However, we are about to complete the first phase of the work in this quarter, and we will see the first quarter revenue in the second quarter. In our natural gas delivery business, investors often ask us that customers will shift from outsourcing manufacturing strategy to internal manufacturing strategy. These resource strategies during the downturn. We see the opposite, because we gained incremental share of one of the largest customers in the fourth quarter and revenue in the first quarter. As our third-largest customers continue to grow, we will also see the growth of natural gas delivery systems in 2019. In our chemical and liquid delivery business, we gain an incremental share outside of the proprietary liquid delivery module. The revenue will also start later in the first quarter. However, the biggest driver of growth is still our proprietary liquid delivery module. Sales there are still very limited today. However, the transformation of end-user technology is progressing very smoothly. We expect LDM revenue to reach a meaningful level in the second half of the year. Our acquisition of IAN engineering gave us a foothold in South Korea, where the equipment market is about $2 billion. It is expected that the lower level of memory investment will continue to have a negative impact on the business. But once it recovers, we will see a growing share and gas supply there. Our equipment -- Sorry, our cooperation with South Korea\'s largest customers on liquid delivery modules continues, and we plan to be able to display products this year, leading to another round of growth in the Korean economy. As you can see, we have made solid progress in the incremental revenue plan. While market conditions have weakened the chance of 2019, the overall opportunity is huge once the industry returns to higher WFE spending levels, which will exceed $100 million. I will continue to update you on our progress every quarter. To sum up, in the fourth quarter, in addition to providing strong cash flow and profits, despite the weakening of business conditions, we have also made great progress in meeting customer needs. We are beginning to deliver on the promise of market share growth. When we enter 2019, our strategy remains the same. We are a semiconductor equipment company focusing on fluid delivery technology. We believe that semiconductor devices will continue to grow faster than most other industrial enterprises throughout the cycle. As I mentioned at the beginning of my preparation speech, over the past four years, we have exceeded the annual growth rate of 12% for fab equipment at an annual rate of 35%. We fully expect that as we execute our opportunities with equity gains, we will continue to go faster than the WFE market. I am confident that Ichor will be a more powerful company with significant operating and revenue leverage during this period. Now, let me hand this over to Jeff for more details on our financial performance for the fourth quarter and guidance for the first quarter. Jeff? Thank you, Tom. Before I start my review, I would like to remind you that the profit and loss indicators discussed today are Unless I\'m sure GAAP-based. These measures do not include the impact of stocks. Basic compensation expenses, amortization of intangible assets acquired, non- Recurring expenses and independent tax items and adjustments. I would also like to point out that a summary of the schedule for GAAP and non-GAAP The Investors section of our website can find the GAAP financial results discussed at this conference call, as well as key balance sheets and cash flow indicators and revenue by geographical region. Fourth-quarter revenue of $0. 141 billion, down 19% from the third quarter, down 23% from 2017. Our gross margin for the fourth quarter is 15. 3% fell from the third quarter, mainly due to a decrease in the number of revenues and product mix, with a lower level of plant absorption. Operating costs $11. As we continue to strictly manage our spending, 1 million of sales are down slightly from the third quarter. Operating profit margin 7. 5% fell by only 230 basis points from the previous quarter and revenue fell by nearly 20%. Our interest expense for the fourth quarter was $2. 6 million. Our tax rate for the quarter is 10%. The lower tax rate is mainly due to changes in the geographical mix of profits. Net income for the fourth quarter was $7. 3 million equals 5. Earnings per share were $ 1% and earnings were 0. 32. Now, let me review. Financial performance in 2018. Our revenue reached a record $0. 824 billion, up 26% year on year. over-year. Gross profit margin 17. 2% increased by 80 basis points over 16. 4% in 2017. Operating expenses increased by 29% compared to 2017, as we increased the full impact of the third acquisition in late 2017 and 2018. The annual operating profit margin in 2018 was 11. 3%, an increase of 60 basis points compared with 2017, and operating profit increased to a record $93. 5 million, up 33% from 2017. In the end, our income reached a record $2. $99 per share, an increase of 21% from $2 per share earnings in 2017. 48. the tax rate was increased by 10. 4% versus 2. 8% in 2017. Now, let me look at the balance sheet. Cash of $43. 8 million, an increase of $10. Net debt fell by $8 million in the third quarter and net debt fell by $1 million in the third quarter. The company made $30. Free cash flow in the fourth quarter after $6 million. 5 million of capital repurchase. In the fourth quarter, the company bought back $30 million, or about 1. 7 million shares, bringing total repurchases to $90 million throughout the year. In the first quarter so far, we have purchased an additional $1. $6 million, bringing the total repurchase since its inception to $91. Of the total $4 million, $100 million was authorized. This total reflects 4. Bought back 4 million shares at an average price of $20. 64 per share. We will continue to review our capital allocation programme and make the necessary investments to ensure that we develop products and build the capacity to support the growth goals discussed earlier by Tom, at the same time, we will balance this with our expected cash flow generation and our management. Daily sales increased from 34 days in the third quarter to 26 days. Inventory fell to $0. 121 billion, down 9% from the third quarter. Now, let me talk about our guidance for the first quarter. Our forecast is that revenue is between $0. 131 billion and $0. 141 billion. As Tom said, our revenue guidance for flat to drop 7% is better than most of our peers in the semiconductor equipment supply chain, in part because our market share began to grow this quarter. At the beginning of the first quarter, we decided to implement additional cost cuts across the organization. Once again, our goal is to balance the customer\'s response needs and provide good financial results while ensuring that we execute on market share growth opportunities. Operating expenses for the first quarter will include moderate growth related to seasonal increases such as payroll taxes, audit and legal fees, which will normalize in the second quarter. We expect interest expenses to be $2. 7 million, the tax rate is 12%, and the number of fully diluted shares is about 22. Shares issued in the first quarter weighted average of 5 million shares. Based on these assumptions, we expect earnings per share for the first quarter to be in the range of $0. 23 to $0. 31. Operator, we\'re ready to answer the question. Please open the line. Question-and- [Answer] Operation instructions] Our first question came from Patrick Ho from Stifel. Please answer your question? Thank you very much. Tom, maybe, first of all, in a lot of downturns, companies like you see an increase in design activity, because customers and OEM equipment suppliers actually have more time to spend on it. Did you see it? Secondly, do you see any leverage from your broader portfolio today, where you gain interest or potential demand from your customers --- Or a company that is not currently in your customer base. Tom rososo, yes, in terms of your first question. We talked about it, Patrick. you\'re right. During the economic downturn, our customers not only have time to ask us to help them with new designs, but more importantly, to qualify for parts and systems that must be subject to strict qualification procedures in order to meet industry-specific standards, and so on. So, we saw that. We saw it-- I am referring to areas where we see it capable of completing the qualification at a fairly fast rate in fact. In addition, we are working with customers in the gas and liquid aspects of our business to develop many different design opportunities. But I can\'t really specify at this point. But these things are definitely happening. In addition to our big four customers, we see the interests of the customers I am talking about. Many of them are specifically for gas delivery systems. In my comments, I mentioned one of South Korea and we have been working closely with them. When we work with them, we may have products ready by the end of this year. So, we are happy to report that all these activities are happening. This is one of the things that has led us to be very optimistic about our ability to continue to gain share. Patrick humabe as a follower Jeff\'s question. It\'s encouraging to see you continue to use cash for stock buybacks at current prices. How do you balance the potential repayment of debt on a future basis, reduce interest payments or some investments that still need to be made to the company? Jeff andlewell, I think as you can see, our first and second is that we continue to invest in some R & D, so we can continue to develop products and work with our customers. Second, we will continue to ensure that we invest in capacity, which we have increased substantially in 2018. We will then look at the residual capital allocation strategy for repurchase or repayment of debt, not what we see on the horizon. I think we will take a very cautious approach. Obviously, we said in our previous conference call that we often discuss this with the board, we will look at the future we see based on our debt levels and any opportunities we may see in the M & A world. So, so far, I think we have proven to be very cautious and we will continue to do so. The next question comes from Sidney Ho of Deutsche Bank. Please answer your question. Sidney horso, Tom, last quarter, you said your big customers had low inventory levels, low inventory levels on gas delivery, and low inventory levels on components. I think you have said something similar in your statement prepared today. But can you give us some extra color? Perhaps related to some of your comments on shipping rates, which you have seen so far this quarter, not last quarter? For small companies outside the first two, do you have a better feeling for these small companies, is inventory still a problem for them? As I said, Tom rohrstrom, we see more and more things in terms of components, development, from the inventory of our suppliers, the precision processing is lower, therefore, shipments from our factory are lower. From the exact quantity left, it is difficult to express it. However, at this point, I think, in particular, the forest that has been announced has done a very good job of reducing inventory in the previous quarter. They lowered about $0. 145 billion. If you do a translation, the translation is about over a quarter, probably a $0. 25 billion tool. So, you have the $0. 25 billion tool and usually we ship the parts for it. This is a big reduction. So I think, for the parts side, we see that the inventory continues to decrease. However, it will have more queues. We can track this by looking at our normal inventory speed, or for that matter, shipping is between components, like a gas panel. It looks like this is synchronized for us. Therefore, we are fairly optimistic that by the end of this quarter, these inventory corrections may be substantially completed. Of course, if we see a little bit of improvement, then we know that they usually rebuild some inventory, although this may not be the best overall management practice they will likely do again, but we will be the beneficiaries. So, we have more to do in terms of stock correction, but we believe we have a long way to go before we get out of the woods. As far as smaller players are concerned, the situation is usually a little worse because they don\'t have the same level of management systems. They tend to use inventory buffers to make up for the lack of a lot of information flow in the management system. So, I\'m not going to mention a client, but we \'ve seen a client, and let me say that his building is much higher than that of Lam\'s building or application. Sidney HoOkay. That\'s helpful. Also, thank you for the details of the incremental revenue opportunity you mentioned earlier. But what do you expect from the linearity of these incremental revenues, now 20 million to $25 million lower than you expected? Is this mostly backend loading or is the distribution more uniform, and I think you\'ll talk about the different components in it? Tom RohrsYes. I think, relatively speaking- It will be a ramp and by definition it will be loaded into the second half. We saw revenue this quarter, and while we won\'t disclose that number, it\'s easy for us to calculate. We will see this increase again in the second quarter, then again in the third quarter, and then again in the fourth quarter. So, we will definitely load some backend in it. We will then also benefit in the second half of the year through our activities in ASML. They have made announcements saying they will actually be disappointed- There were actually a lot in the first quarter. Then they saw a very strong second half and, as you know, Sydney, the idea of the second half was very scattered at this point. First of all, ASML is very powerful for them and we will benefit from it as well. So, we were very happy with the two downwinds in the second half. Sydney HoMaybe is packed in one of the latest. Don\'t put words in your mouth, but of course we probably shouldn\'t expect 19 years in the first half to be better than 18 years in the second half, as you said last quarter? Tom RohrsNo. You put the words in my mouth. The answer is that we should not expect this. Sidney HoDo you expect that in the second quarter, you will see another revenue drop before the second half starts to climb? Tom Roswell, we\'re not going to direct Season 2, Sidney right now. I think I\'m referring to a rebound along the bottom at this point. I think maybe we will do that. The next question is Quinn Bolton from Needham & Company. Please answer your question. Quinn burtoni wants to follow up on Sidney\'s questions about revenue after the first quarter. I know you won\'t be guiding in the second quarter. But when I look into your comments on stock correction, it should end in the first quarter, and at this point it will feel that you may start to align more with consumption, then, your shipping consumption in the first quarter is insufficient. When I think of incremental stock gains that increase in stock returns every quarter, everything I hear is likely to increase. What\'s the problem with this idea? First of all, I mean, if you-- We guided the apartment 7% down. I think Lin directed them down about 4% or 5% in the first quarter, if I remember correctly. So, if you average it to 4%, we\'re in sync with their construction plan today. So I don\'t think we are Shipping consumption fell sharply this quarter. We will have to wait and see what material analysis has been applied in a few weeks. So I will say that. Nevertheless, this somehow coincides with a slowdown in some inventory corrections. So, we\'re going to see how this happens, hopefully it will happen, and as I said, at the end of the quarter, the correction will be behind us, maybe faster than that. Still, we are very cautious because we have not seen it yet. - We haven\'t seen the song of spring yet. We have not yet seen the normal situation that people follow, such as the price change or shift of DRAMs, in which case you will see an increase or two times. Then we get excited. So, I think we\'re going to be far ahead of waiting for some signal before what happened in the second quarter. Quinn Bolton, it doesn\'t sound like-- You thought you were In the first quarter, shipping consumption here increased significantly . . . . . . Tom Ross from the announcement I saw from ASML and Lam, I don\'t think we\'re below- Heavy transport. Quinn Bolton, then, you mentioned the slope of the liquid module in the second half. Is that the case, for the lead customer, or how do you see the business going beyond the lead customer? Tom rohrstrom, we are already tied to the main client and we think he is a great client and can be tied to him. It turned out to be a big disappointment for all of us, we just went through last year\'s results and it was great here. However, it is disappointing that the LDM product did not take off as we hoped. But, I think we all heard better news from that client, what they did with their technology, what they did in the plan. They announced their income. They expressed some optimism about it. So I share the optimism with LDM products in the second half of this year. Having said that, I also mentioned the fact that we are now turning to other customers. I mentioned a very important position in the cleaning industry in Korea. We are working closely with them now. We will have the product working in the lab in the second and third quarters, and as the product develops, this will start to lead to shipping. This is just one of the people we work. So, yes, it\'s not a unique product for a customer. This will be a product that, over time, will not only be used for applications like CMP, but also for applications like cleaning and tracking, we will open up a new world of customers and opportunities for us. Thank you. Our next question comes to the self-examination of ENN and Carl Ackerman of the company. Please answer your question. Gentlemen, Carl Ackermann. Jeff, I have a question for you. Look at March\'s gross margin assumption. - Well, December, and then too. How important is plant utilization for this guide and product portfolio? I think, at this critical moment, would you think it\'s too early to integrate the manufacturing bases you \'ve acquired through mergers and acquisitions in the past two years? I think, even if you\'re moving towards a $75 million incremental design win this year, would your idea of optimizing fixed costs help? Jeff and Reina. Good question. So, I think if you run away with this color, you might know that at the high end, our gross margin is quite similar. I think the fixed cost is-- Compared to the third quarter, this may be the biggest change in the negative impact on gross profit margin. The portfolio affects it a little, but it doesn\'t affect it as we see it in fixed costs. That being said, we always want to be more efficient. So when we take a full look at our facilities, I won\'t say anything inappropriate. There are some potential opportunities for some additional integration in the business and/or facilities. We will, therefore, keep an eye on this as well and work to resolve it. We have-- We had a lot of capabilities last year, and we probably didn\'t have as much as we thought. We transferred some of them back. So, we also adjusted some of them. Now, Carl, I think it\'s important here that when we talk about these market shares, that $75 million will be very, what follows is a very, very small incremental fixed cost. As Jeff said just now, most of the capacity is actually a place. There are a few more things to do. But on top of that, on the operating expenses line, there will be very few hiring if you want, or an increase in operating expenses to support the extra majority of the dollar. So I think we hope that the leverage seen through these fixed costs will become very obvious in the year. Obviously, when we buy more money with very, very little money --- More is the way of fixed cost. This is obvious to everyone. Carl Ackerman Tom or Jeff, last quarter, you mentioned that if more happens In order to reduce your own fixed costs, your customers may actually accelerate outsourcing. Given your readiness to maintain the liquid delivery module, this outsourcing opportunity seems to be actually accelerating. I guess I\'m curious if you see other opportunities- I mean, these are important to themselves. But, I\'m curious, in the second half of 2018, do you have other opportunities to drive content growth in other areas of your business? We mention them occasionally. Many of our opportunities are in a new location. We\'ve been -- We talked about Korea. We do have quite a bit of activity now in developing the way we can penetrate Japan. Next to America. S. Japan has more semiconductor capital equipment companies than anywhere else, such as Tokyo electronics, Danny Peng Ping, Etro, etc. the semiconductor capital equipment built in Japan is worth billions of dollars. We have not lost this. So we have some plans that we think are very good. We review them on a regular basis with the board of directors, where we are barely ready to think and talk about them more broadly. But now, you can know that there are some big fish outside to fry and we are looking at it very, very carefully. We believe that without adding a lot of fixed costs to our balance sheet, we have some methods and means to do this again. Operator[ Operation instructions] Our next question comes from the securities of David Duree rainbow trout on the front line. Please answer your question? David DuleyI thought the first question was a bit from a macro perspective. Guys, what kind of fab device do you guys register now for 2019? We heard about Tom rososo. - Again, we get a lot of leads from our customers, which makes sense. We see them now, as a few of them, leading down in quite high placesteens. So we see that there seems to be a lot of significance in the number of about 42 fab devices, and now it may be as low as 40. But that\'s the number we focus on in planning and thinking. We think that in addition to the business I mentioned including ASML, one of the reasons there may be some incremental business is that we think our current level of operations is more similar to high- More than 30 years old than low40s. As far as mathematics is concerned-- If we want to reach the number of 41, 42, the second half will definitely be higher than the middle of the year. In their 30 s, they are actually higher than the mid-range of 40. So that\'s how we get our leads, and that\'s what we think we\'re planning. At least it should be noted that in the past two months, this number has declined in the dripping torture in China, from about 50 drops to about 48, 47, 46, now for 41, 42. And so, I -- Let\'s say that there is no rule that at some point it can\'t actually be lower than that. But these are the numbers we use now. David durayor So, this year\'s math is probably because you see that the lab business is likely to drop as you see those large OEMs, which is a very high level of youth, then you might add the $75 million or $80 million you\'re referring to, and that estimate is a good estimate for the best guess we can get this year? Tom rohrstrom, this is an estimate, but you have to be careful when you see a 18% drop in large OEMs, 19%, because the business of large OEMs is very rich, called service The service business is often rather flat and may even grow. So, if they tell you that their entire business is down by 18% or 19%, which means that their equipment business will be down by 20% or more, because their service business will be relatively stable. So, be careful when identifying these numbers. David durayor This is a good point of view. On the next topic, you talked about the incremental income that I think is now $75 million or $80 million and it doesn\'t have much fixed cost. When you -- Is there a way to describe what might be used by the gross margin line or the operating line with incremental revenue, or how should we consider the new profitability income? Jeff and Reina. Dave, I think we talked about this in the past. But again, in fact- When Tom talks about welding, precision machining, like the delivery module, all of this increases our profits. These margins are higher than what you see today. So, considering the welding gross margin, in the 20 s to 20 s, precision machines may be in the 30 s, LDM may be more like welding pieces. The incremental profit margin will therefore be slightly higher than that. David durayor Then, I think, the last thing for me, is just a few clarifications. Can you tell us the size of 10% customers this quarter? Then, looking ahead to each year, what should we expect from the stock account? Jeff andlesso, we don\'t have one. - We will disclose the final revenue size of our customers in K. So, I want to do this on the phone. What do I think-- It will be 22 in the first quarter. 5. Obviously, in a unified share price, we do not really see that there is almost no increase in this. It might drop a bit if we finish the repo, but I can\'t comment on that. So I won\'t--I would -- For simplicity, I may be using these numbers this year. David durayor Then, when you talk about the rate of decline in these three businesses, I might write this down, you say a family in their 20 s and a family in their 30 s, can you clarify which one it is? The 20 s of Jeff and resonweldons are low, and the precision machining will be low at 30 s. Thank you very much. Thank you. The conclusion of this question isand- The answer to today\'s program. If there is any further comment, I would like to return this show to Tom Rohrs. Tom rohrstrom, thank you very much for joining us on this quarter\'s conference call. We are all looking forward to updating your information on May\'s Q1 phone. Thank you. Ladies and gentlemen, thank you for attending today\'s meeting. This did end the project. You can disconnect now. Good day.