TTMI - NASDAQ

Good afternoon. Thank you for standing by. Welcome to the TTM Technologies Inc. Fourth Quarter 2024 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, February 5, 2025. Sameer Desai, TTM's Vice President of Corporate Development and Investor Relations will now review the TTM's disclosure statement.

Thank you, Sheri. Before we get started, I would like to remind everyone that today's call contains forward-looking statements, including statements related to TTM's future business outlook. Actual results could differ materially from these forward-looking statements due to one or more risks and uncertainties, including the risk factors we provide in our filings with the Securities and Exchange Commission, which we encourage you to review. These forward-looking statements represent management's expectations and assumptions based on currently available information. TTM does not undertake any obligation to publicly update or revise any of these forward-looking statements, whether as a result of new information, future events, or other circumstances, except as required by law. We will also discuss on this call certain non-GAAP financial measures, such as adjusted EBITDA. Such measures should not be considered as a substitute for the measures prepared and presented in accordance with GAAP, and we direct you to the reconciliations between GAAP and non-GAAP measures included in the company's earnings release, which is available on the Investor Relations section of TTM's website at investors.ttm.com. We've also posted on that website a slide deck that we will refer to during our call. I will now turn the call over to Tom Edman, TTM's Chief Executive Officer. Please go ahead, Tom.

Thank you, Sameer. Good afternoon, and thank you for joining us for our fourth quarter and fiscal year 2024 conference call. I'll begin with a review of our business highlights from the quarter and a discussion of our fourth quarter results followed by a summary of our business strategy. Dan Boehle, our CFO will follow with an overview of our Q4 2024 financial performance and our Q1 2025 guidance. We will then open the call to your questions. Highlights of the quarter's financial results are summarized on Slide 3 of the earnings presentation posted on TTM's website. We delivered an excellent quarter and a strong full year in 2024, and I would like to thank our employees for their hard work and contributions in support of those results. In the fourth quarter of 2024, TTM achieved revenues and non-GAAP EPS above the high end of the guided range. Revenues grew 14% year-on-year and represented the fourth consecutive quarter of year-on-year growth due to demand strength from our Aerospace and Defense, Data Center Computing and Networking end markets, the latter two being driven by Generative AI. While the growth in revenues was partially offset by year-over-year declines from our Automotive and Medical Industrial and Instrumentation end markets, we achieved record high revenue in our A&D and Data Center Computing end markets. Overall, the company book-to-bill was 1.09, with the A&D book-to-bill at 1.14. Demand in our Aerospace and Defense market, which was 47% of revenues for the quarter, continues to be strong, and we now have a record program backlog of approximately $1.56 billion. Finally, non-GAAP operating margins were double digit for the second consecutive quarter and reflected continued solid execution. I would now like to provide a strategic update. TTM is on a journey to transform our business to be less cyclical and more differentiated. Over the past several years, we have consistently emphasized that a key part of our strategy is to add value to the product solutions that we deliver to our customers, particularly in the Aerospace and Defense market. As a result of strategic transactions in the Aerospace and Defense end market through the acquisitions of Anaren and Telephonics, over 50% of our revenues in Aerospace and Defense are now generated from engineered and integrated electronic products, with printed circuit boards contributing less than 50% overall. We have been successfully executing against this strategy, and our Aerospace and Defense and operations teams have steadily improved operating margins. The financial impact of this strategy really began to show in 2024 with revenues for the year up 9.4% and non-GAAP operating margins up 70 basis points. And heading into the first quarter, we expect to see a significant reduction of the normal seasonal impact on non-GAAP operating margins in comparison to the past four years. Another important element of our differentiation strategy is our investment in a new state-of-the-art, highly automated PCB manufacturing facility in Penang, Malaysia to service customers in our commercial end markets. This new facility in Malaysia is supporting customers in markets such as Data Center Computing, Networking and Medical, Industrial and Instrumentation. We continue to make progress ramping volume production as we navigate the necessary customer audits and qualifications. We gathered further momentum in the fourth quarter with solid bookings, and we expect the ramp to continue to accelerate this year. I'd also like to update you on the consolidation of our manufacturing footprint. We previously announced our plan to close three small printed circuit board manufacturing facilities in order to improve total plant utilization, operational performance, customer focus and profitability. During the course of 2023, PCB manufacturing operations in Anaheim and Santa Clara, California and Hong Kong were closed and consolidated into TTM's remaining facilities. We continue to ramp production for the transferred parts at receiving facilities. We also previously announced plans to consolidate two smaller non-PCB integrated electronics facilities in Elizabeth City, North Carolina and Huntington, New York into existing facilities in order to improve efficiencies. As of the end of fiscal year 2024, the closure of Elizabeth City has been completed and the closure of Huntington is expected by the middle of 2025. After these consolidation plans are complete, TTM will operate a total of 22 facilities worldwide. Finally, I would like to update you on the previous announcement of our intent to expand our advanced technology capability for the aerospace and defense market through the construction of a new facility immediately adjacent to our existing Syracuse, New York campus. This new facility will focus on specialized high technology printed circuit board production providing customers with reduced lead-times and a significant increase in domestic capacity for Ultra HDI PCBs in support of increasing national security requirements for high-technology PCBs. We are continuing construction for the new building and expect initial low rate production in 2026. As previously announced we expect the investment for Phase 1 of the proposed project including capital for campus-wide improvements to be in the range of between $100 million to $130 million. We will be receiving support from both Federal and State sources on the order of approximately $52 million subject to certain requirements and contingencies which will serve to offset the initial capital investment and lower operating expenses. Now, I'd like to review our end markets which are referenced on Page 4 of the earnings presentation on our website. The Aerospace and Defense end market represented 47% of total fourth quarter sales compared to 46% of Q4 2023 sales and 46% of sales in Q3 2024. Revenues grew 16% year-on-year to an all-time record high. The solid demand in the defense market is a result of a positive tailwind in previous defense budgets and supplemental funding related to conflicts in Ukraine and the Middle East our strong strategic program alignment and key bookings for ongoing franchise programs. We had a strong bookings quarter with a book-to-bill ratio of 1.14, leading to a record A&D program backlog of approximately $1.56 billion at the end of the fourth quarter. During the quarter we saw significant bookings for the Patriot MRAM and TPY-4 programs. We expect sales in Q1 from this end market to represent about 47% of our total sales. Bookings in the Aerospace and Defense market ship over a longer period of time than in our commercial markets and provide good visibility into future revenue growth. For the full year, Aerospace and Defense revenues grew 12% due to strong demand and improved operational execution. In 2025 we expect end market growth to be above longer term market projections of 3% to 5%. Sales in the data center computing end market represented 22% of total sales in the fourth quarter compared to 17% in Q4 of 2023 and 19% in the third quarter of 2024. This end market saw 44% year-on-year growth due to a record high due to strength from our data center customers building products for Generative AI applications. The higher-than-expected revenues in Q4 were a result of pull-ins from Q1. As a result we expect revenues in this end market to represent 21% of first quarter sales. For the full year data center computing increased 58% due to the increased demand for PCBs for generative AI applications. In 2025 we expect to be above the longer-term end market growth of 7% to 9% driven primarily by generative AI applications. The Medical Industrial Instrumentation end market contributed 13% of our total sales in the fourth quarter compared to 16% in the year ago quarter and 14% in the third quarter of 2024. The year-over-year decline was generally the result of lower demand and ongoing inventory normalization particularly in the industrial and medical areas. We saw increased demand from our semiconductor testing customers as Generative AI drove increased purchases of automated testing equipment. For the first quarter we expect the Medical Industrial Instrumentation end market to be 13% of revenues. For the full year MI&I declined 9% due to the continued inventory correction at many customers that began in 2023 following years of above market growth. In 2025, we expect growth to be in line with the 2% to 4% longer-term industry forecast for this end market. Automotive sales represented 11% of total sales during the fourth quarter of 2024 compared to 15% in the year ago quarter and 14% during the third quarter of 2024. The year-over-year decline for Automotive was due primarily to continued inventory adjustments and soft demand at several customers. We expect our Automotive business to contribute 11% of total sales in Q1. For the full year Automotive decreased 12% due to the inventory correction and weak demand at Automotive customers as EV demand stalled in developed countries and Chinese OEMs took share in China. We expect this market in 2025 to be below longer-term forecast of 3% to 5% growth due to ongoing demand softness. Networking accounted for 7% of revenue during the fourth quarter of 2024. This compares to 6% of revenue in the year ago quarter and 7% during the third quarter of 2024. Year-on-year growth was 35%, the strongest in many quarters due to increased demand from certain Networking customers. In Q1, we expect this end market to be 8% of revenues as this market continues to recover driven by AI-related demand and new products. For the full year Networking declined 11% due to inventory correction and weak demand. In addition, we sold the Shanghai BPA facility in Q1 of 2023 that had $8 million revenue in 2023. We expect this market to be above longer-term forecast of 2% to 5% growth in 2025. Next I'll cover some details from the fourth quarter. This information is also available on page 5 of our earnings presentation. During the quarter, our advanced technology and engineered products which include HDI rigid flex, RF subsystems and components and engineered systems accounted for approximately 50% of revenue a record high. This compares to approximately 47% in the year ago quarter and 49% in Q3. We are continuing to pursue new business opportunities and increase customer design engagement activities that will leverage our advanced technology and engineered products capabilities in new programs and new markets. PCB capacity utilization in Asia Pacific was 59% in Q4, compared to 51% in the year ago quarter and 60% in Q3. On a year-on-year basis, utilization rates improved as data center demand continues to be strong and the networking market rebounded. Our overall PCB capacity utilization in North America was 34% in Q4, compared to 35% in the year ago quarter and 35% in Q3. As a reminder, North America utilization figures are not as meaningful as Asia Pacific because bottlenecks in these high-mix low-volume facilities tend to occur in areas outside of plating, which is the core process that we use for calculating utilization rates. Our top five customers contributed 44% of total sales in the fourth quarter of 2024, compared to 44% in the fourth quarter of 2023. We had two customers with over 10% of our total sales in the quarter. At the end of Q4, our 90-day backlog, which is subject to cancellations and includes shipments into customer hubs was $612.6 million compared to $575.9 million at the end of the fourth quarter last year. Starting in Q1, we will report total company backlog excluding shipments into the hubs to provide a more accurate measure of backlog. And as I mentioned earlier, our aerospace and defense program backlog increased from $1.33 billion at the end of Q4 last year to a record of $1.56 billion at the end of Q4 this year. Our overall book-to-bill ratio was 1.09 for the three months ended December 30th. Now Dan will review our financial performance for the fourth quarter. Dan?

Thanks, Tom, and good afternoon, everyone. I will review our financial results for the fourth quarter that were included in the press release distributed today and are summarized in slide 6 of the earnings presentation posted on our website. For the fourth quarter, net sales were $651 million, compared to $569 million in the fourth quarter of 2023. The 14% year-over-year increase was due to growth in our aerospace and defense, data center computing and networking end markets, partially offset by declines in our automotive; medical industrial and instrumentation end markets. For the full year, net sales were $2.4 billion, compared to $2.2 billion in 2023. The 9% increase was driven by growth in our data center computing and aerospace and defense end markets, partially offset by declines in our automotive; medical industrial and instrumentation and networking end markets. GAAP operating income for the fourth quarter of 2024 was $9 million inclusive of a $32.6 million goodwill impairment charge related to the RF&S Components segment, compared to GAAP operating income for the fourth quarter of 2023 of $34.6 million. On a GAAP basis, net income for the fourth quarter of 2024 was $5.2 million or $0.05 per diluted share, inclusive of a $32.6 million goodwill impairment charge related to the RF&S Components segment. This compares to GAAP net income for the fourth quarter of 2023 of $17.3 million or $0.17 per diluted share. The remainder of my comments will focus on our non-GAAP financial performance. Our non-GAAP performance excludes M&A related costs, restructuring costs, certain non-cash expense items, such as amortization of intangibles, impairment of goodwill, stock compensation, gains on the sale of property and other unusual or un-frequent items. We present non-GAAP financial information to enable investors to see the company through the eyes of management and to facilitate comparisons with expectations and prior periods. Gross margin in the fourth quarter was 20.5% and compares to 21.3% in the fourth quarter of 2023. The year-on-year decrease was due to continued Penang start-up costs, higher employee-related costs, and declines in the Automotive market, partially offset by higher sales volume, particularly in the Data Center Computing, and Aerospace and Defense end markets, and improved operational execution. Selling and marketing expense was $18.9 million in the fourth quarter or 2.9% of net sales versus $17.8 million or 3.1% of net sales a year ago. Fourth quarter G&A expense was $40.9 million or 6.3% of net sales compared to $34.9 million or 6.1% of net sales in the same quarter a year ago. In the fourth quarter of 2024 Research and Development was $7.6 million or 1.2% of net sales compared with $7.3 million or 1.3% of net sales in the same quarter last year. Our operating margin in the fourth quarter of 2024 was 10.1%, a 60 basis points decrease from 10.7% in the same quarter last year, due primarily to the decrease in gross margin as I just mentioned. Interest expense was $10.7 million in the fourth quarter of 2024 compared to $12.9 million in the same quarter last year. During the fourth quarter of 2024, there was a $14.1 million foreign exchange gain below the operating income line compared to a $7 million foreign exchange loss in the fourth quarter of 2023. The current year impact was primarily driven by unrealized foreign exchange gains from translation of our China and Malaysia balance sheets from local currency into the U.S. dollar functional currency, which experienced significant appreciation against the local currencies in the fourth quarter. The full year 2024 net impact from foreign exchange gains and losses was a gain of $1.2 million compared to a $3.9 million loss in the prior year. Due to the significant quarterly volatility of unrealized foreign exchange gains and losses driven by the translation of our China and Malaysia balance sheets from local currency into the U.S. dollar functional currency, we have determined appropriate to remove the unrealized foreign exchange net impact from our non-GAAP financial measures, beginning with our first quarter of 2025. In order to provide our financial statement users with comparative information, we have attached a second schedule to our earnings release that provides restated historical measures of non-GAAP net income, non-GAAP EPS and adjusted EBITDA. In addition, government incentives and interest income totaled $2.4 million, resulting in a net $16.5 million gain or a $0.14 impact to EPS in the current quarter. This compares to a net loss of $3.3 million or a $0.03 negative impact to EPS in the same quarter of last year. Our effective tax rate was 12.3% in the fourth quarter resulting in a tax expense of $8.8 million. This compares to a rate of 4.1% or a tax expense of $1.9 million in the same quarter last year. Fourth quarter 2024 net income was $62.8 million or $0.60 per diluted share. This compares to fourth quarter 2023 net income of $43 million, or $0.41 per diluted share. Adjusted EBITDA for the fourth quarter of 2024 was $108.7 million, or 16.7% of net sales, compared with fourth quarter 2023 adjusted EBITDA of $80.9 million, or 14.2% of net sales. Depreciation for the quarter was $26.5 million. Net capital spending for the quarter was $52.8 million. Cash flow from operations in the fourth quarter of 2024 came in strong at $86.1 million representing more than 13% of net sales. Cash and cash equivalents at the end of the fourth quarter of 2024 totaled $503.9 million. Our debt -- net debt divided by last 12 months EBITDA was 1.2 times. Now I will turn to our guidance for the first quarter of 2025. We project net sales for the first quarter of 2025 to be in the range of $600 million to $640 million, and non-GAAP earnings to be in the range of $0.37 to $0.43 per diluted share, which is inclusive of operating costs associated with starting up our Penang facility. EPS forecast is based on a diluted share count of approximately 104.8 million shares, which includes the dilutive effect of outstanding stock options and other stock awards. We expect SG&A expense to be about 9.4% of net sales in the first quarter and R&D to be about 1.1% of net sales. We expect interest expense of approximately $11.2 million and interest income of approximately $2 million. We estimate our effective tax rate will be between 12% and 17%. Further, we expect to record depreciation of approximately $28.1 million, amortization of intangibles of approximately $9.2 million, stock-based compensation expense of approximately $8.9 million, and non-cash interest expense of approximately $0.5 million. Finally, I'd like to announce that we will be participating in the TD Cowen Aerospace and Defense Conference in Arlington, Virginia on February 13; The Citi Industrial Tech and Mobility Conference in Miami on February 20; and the JPMorgan Leveraged Finance Conference in Miami on February 25. That concludes our prepared remarks. Now we'd like to open the line for questions. Operator?

Thank you. [Operator Instructions] And our first question will come from the line of William Stein with Truist Securities. Your line is open.

Great. Thank you for taking my questions. First, Tom, I think you talked about smoothing the seasonality in operating margin performance and that is apparently reflected in your Q1 guidance. Can you talk about what's changed that's allowing you to do this? And maybe quantify the effect?

Sure. Yes. Let me address, I think, the changes in the business that have allowed us to do this. The biggest shift has been improving that A&D revenue mix. And as we've done that we've effectively over time brought -- over the last six years we brought A&D up from a level of approximately around 25%, 30%, now to where we're looking at 47% -- 46%, 47%. So that shift in revenue; the consistency of performance associated with the North America facilities that we added there; the non -- the integrated electronics facilities, as we call them the non-PCB facilities, bringing that into our mix that has allowed us to really improve in terms of that Q4 to Q1 compare. We still do -- in A&D, we still do see a little bit of seasonality. Q4 tends to be a better quarter, but it's not as dramatic of a drop-off. The second thing, we did is really related to our commercial business. And that in 2020, we sold our Mobility business. That was a business that really relied on the consumer products area, very seasonal strong in Q3, Q4, a big drop off in Q1 and then into Q2. And also -- and therefore, a very difficult business to manage from the standpoint of a highly asset-intense business; and then working with that seasonality, which always put pressure on our margins. So selling that business improving the A&D mix. And then, on the commercial business, we've just continued to build that strong business-to-business connection with our customers. Again, these are longer cyclical, longer cycle markets. Yes, we still do have Chinese New Year and that is a factor certainly in Asia, does affect our production volumes, but the demand base is certainly stronger and stronger over time. So, that's the real combination that has worked for us. And from a quantification standpoint, we used to see revenues could drop off 15% 20% in that quarter. They certainly today are much more consistent, as we go from Q4 to Q1. Dan, do you have anything to add there?

No, I agree with that. And that will drive -- with the volumes staying up that will drive improvement in the margins obviously, considerable over the same comparative last year, so.

Great. As a follow-up, I'm hoping you can give us a bit more detail on Penang. A few quarters ago, you pushed out the sort of timing to ramping to breakeven, but I think you've reiterated that's sometime, what Q3 or thereabouts. I'm just hoping you can maybe tell us what -- how much revenue Penang generated in Q4? What's contemplated in Q1? And what's the timing to breakeven? Any details you can offer us there? Thank you.

Yes, sure. The Q4 revenue level very, very small, really not material in Q4. As we start to look at Q1, we'll be pushing up to somewhere let's just say, in the $4 million to $5 million range, will also – so, still a good start in terms of commercial production. We still -- as we ramp that commercial production, we're going to be working through that yield curve particularly as these are new parts that we're putting into production. But it's nice to see that level of revenue coming in and encouraging in terms of starting to see the program intersection occur. So we had been waiting for qualifications to come through. Those have been coming through and now we're starting to see program intersection, so we can start to register revenue at the facility. So that will continue through the course of the year, as we ramp into programs. And you're correct that we've been -- we're still looking at that Q3 time period to get to that breakeven level.

Thank you.

Thank you. One moment for our next question. And that will come from the line of Mike Crawford with B. Riley Securities. Your line is open.

Thank you. You talked about strong bookings in Patriot MRAM some others in Aerospace and Defense. Is there a way you could break down the percent of backlog or program backlog of PCB versus Integrated Electronics?

So roughly, if you look at backlog levels it reflects -- pretty well reflects our revenue mix there in A&D Mike. So about 50-50 approximately. We did bring -- as Syracuse comes into the mix in early next year we'll probably see -- we'll see the PCB revenue come up a bit as that increases and the balance against some of the organic growth that we continue to see in IE. So, again, roughly half and half in terms of the backlog.

Okay. Thanks, Tom. And I guess, related to that would be potential yield curve effect and margin impact or expense it as you start the LRIP at the new PCB facility in 2026 versus I suppose it would probably be early 2027 when it would start to be running a little bit more smoothly and how that might all affect margins?

So I'll let Dan talk about a little bit about the margins but let me explain a little bit how the process will work in the case of Syracuse. We'll be working very closely hand-in-hand with our primary customer on that facility. And so what you'll be seeing there is the equipment as we bring it in, and then early next year, we'll be running that equipment as part of really a qualification there. And so you won't see significant impact until you get through the first part of next year. Now, remember the revenues associated with the plan also are in the $100 million at full -- at production level rate. So it's not going to be anywhere as significant in terms of revenue contribution as Penang, certainly not in the early stages. But Dan, do you have any further comments there?

No, I'd just echo that comment there that it's half the size of Penang, and so you won't expect the same level of headwind to the margins. And currently, I mean, we don't give one-year or two-year guidance, but it's going to be minimal impact to 2025. And I would say much less than Penang in 2026 as we ramp up, because of the relative size.

Okay. Thank you. And just final question would be, I know it's not plating as a bottleneck in North America in your high mix facilities, but what are the main bottlenecks there in North America today and might that be similar to what you might expect in Syracuse or not?

Yeah. That's a good question. So the bottlenecks absolutely move around in those kinds of facilities. Interestingly front-end engineering, so you start with front-end it can be an area where we have problems getting -- if we get hit with a lot of orders that can be an area where we bottleneck. Going into the other two significant areas that we can bottleneck in are our drill -- the drill area and then the test area. Again, tend to be smaller facilities. Tend to have more single point or perhaps only one backup piece of equipment to use when you're seeing orders rise. So depending on the complexity of the part, depending on the speed required you're going to see those bottlenecks move around the facility. And you're absolutely right. We're in really good shape on plating capacity in North America at this point. We have -- we added significantly in-capacity. We've been using some of the knowledge that we've gained in our commercial operations and that's been informing our purchasing -- equipment purchasing strategy. And so over the last two years we have added significant plating capacity in North America that gives us that flexibility to respond. As we get into Syracuse, you're going to see with an Ultra HDI facility, a lot of weight on the plating. So -- but the facility will be built for that. We're building it to handle the kind of high-layer count, that's going to be required and the high-density interconnect requirements. So we're building it with that in mind. Again, we'll -- if it's not going to be plating what you'll see is primarily drill and test will be areas where we may face challenges.

Great. Thank you very much.

Thank you, Mike.

Thank you. One moment for our next question. And that will come from the line of James Ricchiuti with Needham. Your line is open.

Hi. Good afternoon. This is Chris Grenga on for Jim. I was just wondering, if you could elaborate on the pull-ins that you saw in the Data Center end market? And whether you expect that to be a headwind in the current quarter? Or if strong demand there is going to backfill that pull-in activity you saw in Q4? Thank you.

Yeah. Great question, Chris. The -- so it's going to be a little bit of both. We -- as you can see as we're looking at Q1 we are expecting Q1 to be sequentially down slightly from Q4. That is a function of yes, the pull-in plays into that. The other piece though is Chinese New Year. So we are operating one of the primary facilities for Data Center and Networking in – during Chinese New Year but the balance of our facilities in Asia will be down for Chinese New Year and that has an impact in terms of our ability to ship additional product out. So it's a combination of those two factors.

Got it. How are you – now that sort of the contours of the tariff regulations are starting to come into view, how are you approaching that? And I guess what types of conversations are you having with your customers around abating or minimizing the impact of those tariffs?

Yes. So I'm glad the contours are coming into view for you. We're still staying very – trying to stay as close as possible to the situation. And I'll tell you the – so we have a number of scenarios modeled of course internally. And certainly in the case of direct imports of PCBs from China into the US, our customers own those PCBs and it remains a very small portion of our revenue. So an additional 10% tariff there may cause what's left which is – if you look at revenue about 3% last year's revenue that portion may shift. What our customers have done a very good job of is cross-qualifying now with multiple assembly locations. So if they do see tariffs move what we'll see potentially is the ship to will change into another geography. But – and they will at least for a period of time ask us not to ship into a geography that's affected by the tariffs. So that's been – it's actually quite impressive. The flexibility has now been built in from a supply chain resiliency standpoint with the contract manufacturers that we're shipping to. So that's the primary mitigation strategy that our customers are using.

Great. Thank you very much.

Thank you.

Thank you. [Operator Instructions] I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Tom Edman for any closing remarks.

Yes. Thank you. Just wanted to again reiterate that to thank everyone for joining us on today's call. And then just to summarize some of the major points that we hit in the call. We did – we delivered strong revenues and growth in Q4, 14% year-on-year, record revenues in Aerospace and Defense in the Data Center Computing markets. Second, we had a second consecutive quarter of double-digit operating margins. Third, we generated a healthy cash flow from operations of 13.2% of sales and we were able to bring our net debt-to-EBITDA leverage down to 1.2 times. So fantastic project there – or progress there from a financial standpoint. And of course, we continue to focus on our strategic initiatives as we bring up our new facility in Penang and complete the construction this year of our facility in Syracuse. So, in closing, I'd just like to thank all of you our employees and our customers of course for your and their continued support as we navigate 2025 going forward. Thank you very much. Good bye.