Greetings and welcome to the Kulicke & Soffa 2024 First Quarter Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Joe Elgindy, Senior Director, Investor Relations. Thank you. Please begin. .

Thank you. Welcome, everyone, to Kulicke & Soffa’s fiscal first quarter 2024 conference call. Fusen Chen, President and Chief Executive Officer; and Lester Wong, Chief Financial Officer, are also joining on today's call.

Non-GAAP financial measures, referenced today, should be considered in addition to, not as a substitute for, or in isolation from, our GAAP financial information. GAAP to non-GAAP reconciliation tables are included within our latest earnings release, and earnings presentation.

Both are available at investor.kns.com, along with prepared remarks for today’s call. In addition to historical statements, today's remarks will contain statements relating to future events and our future results.

These statements are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to risks and uncertainties that may cause our actual results and financial condition to differ materially from the statements made today.

For a complete discussion of the risks associated with Kulicke & Soffa, that could affect our future results and financial condition, please refer to our recent and upcoming SEC filings, specifically our most recently filed Form 10-K, and the 8-K filed yesterday. With that said, I will now turn the call over to Fusen Chen for the business overview.

Please go ahead, Fusen. .

Thank you, Joe. Good morning, everyone. Looking ahead into fiscal 2024, we remain focused and optimistic. Our businesses remain on track to support new levels of value creation as our core market recovers. We continue to anticipate a return to an above-average industry growth rate by the end of the fiscal year.

As the semiconductor industry returns to a more normal growth pattern through fiscal 2024, we remain in dominant leadership positions across core markets and will continue to aggressively drive key strategic initiatives providing additional paths to long-term value creation and profitability.

Specifically, these strategic initiatives are centered around three key businesses – Ball Bonding, Advanced Packaging, and Advanced Display. I will provide additional details to each of these points shortly, but first I would like to summarize our financial performance, end market observations, and share an update on the Advanced Dispense business.

For the December quarter we delivered $171.2 million of revenue, just above our guidance midpoint, with GAAP net income of $9.3 million and non-GAAP earnings per share of 30 cents. From a market standpoint, the fiscal first quarter was aligned with seasonal expectations.

Based on external market forecasts, customer feedback and discussions, we continue to anticipate improvements over the course of 2024 with more significant demand in the second half of 2024. We anticipate overall industry conditions will remain favorable going into 2025 as we expand our market positions.

Over recent months, we have made significant progress with our Advanced Dispense business and are actively competing for several opportunities in parallel. We continue to target key opportunities across our served end markets which require high-precision dispense capabilities combined with world-class motion control capabilities, K&S is known for.

Initial customer feedback has been strong, and we are increasingly confident we will leverage and grow these opportunities over the coming years. Turning to the end-market review, we continue to see signs of broader cyclical improvement, and also anticipate gradual recovery through the fiscal year.

Seasonal dynamics impacted our December quarter results, as expected, this effect was most pronounced within General Semiconductor. Here, we experienced softer demand due to seasonal patterns which effected the Ball Bonding business and softer power semiconductor market conditions which affected our Wedge Bonding business.

The power semiconductor market is going through a period of inventory and capacity digestion causing a near-term headwind in Wedge Bonding. We continue to expect trends in power semiconductor to improve over the long-term and support growth of our Wedge Bonding business.

For Ball Bonding, we anticipate the demand environment to improve as semiconductor unit growth returns in fiscal 2024. Next, LED has remained relatively soft with demand primarily attributable to general lighting.

We remain focused on the existing qualification engagements for both LUMINEX and Project W and I will share an update to both opportunities shortly. Within Automotive & Industrial, macro and industry factors have impacted the near-term demand for our Wedge solutions.

Despite the well-known softness in Automotive near-term, we continue to anticipate specific opportunities for K&S in the battery assembly space later this year. This specific battery opportunity is unique to K&S and will help mitigate some of the existing demand softness affecting the broader automotive market.

Longer-term, as semiconductor content and complexity within vehicles advances, we remain strategically aligned with automotive trends. We will continue to provide leading-class equipment to support the transition to more advanced and sustainable vehicles, including efficient power delivery and storage applications.

Finally, within Memory we have seen demand improve significantly for our leading NAND solutions across multiple customers. Memory revenue in the first fiscal quarter exceeded revenue for the prior fiscal year.

This strong improvement provides further confidence that we are past trough in the memory market and we continue to actively pursue near and long-term strategies to expand share in high-volume and leading-edge DRAM applications.

During the December quarter, we have also booked revenue for multiple systems capable of supporting vertical-fan-out applications in production and remain very positive on the long-term potential of this smart packaging approach.

We currently anticipate overall end market demand will return to a more normalized level by the end of fiscal 2024 and continue well into fiscal 2025.

As we prepare for this next period of demand recovery, we are extremely focused to execute key K&S opportunities which will further diversify revenue, expand market growth, and sustainably enhance earnings potential over the long-term.

I would like to provide a brief update on our unique positions within the Ball Bonding, Advanced Packaging, and Advanced Display opportunities. The semiconductor assembly market continues to evolve and we are well-positioned to add more industry value in the form of power efficiency, performance, package-level transistor density and cost.

This technology-driven evolution within assembly is demanding more feature rich and capable assembly solutions which we are well prepared to deliver. These semiconductor opportunities will continue to benefit our Ball Bonding and Advanced Packaging businesses over the long-term.

Within Ball Bonding, we continue to deliver new feature-rich solutions which will further extend our leadership positions, drive share gains and also help enhance and sustain long-term gross margins. Our initial two systems, POWERCOMM and POWERNEXX, were recently released and have been well received by customers.

We are ramping the production of these initial systems during the March quarter. As explained on previous calls, the Ball Bonding process remains the most dominant and cost-effective solution for both high-volume single and multi-die packages.

As a pioneer in Ball Bonding with decades of industry leadership, we continue to maintain a dominant market share in these key growth areas. Additionally, we continue to see many consumer, mobile and IOT-based applications in high-volume markets seeking new packaging approaches.

These new approaches provide greater levels of transistor density at the package-level and provide K&S with opportunities to add additional value. Within Ball bonding, these technology-driven changes are demanding more complex looping and higher wire-count per package.

Our market leadership and persistent development efforts provide a unique position to drive industry-level changes. Currently, we see new markets emerging in shielding and also within high-potential stacked-die applications, such as vertical-fan-out, which are providing specific, long-term and unique opportunities for the Company.

New shielding applications are being deployed for both long and short-distance wireless communications. As bandwidth increases and wireless communications become more engrained in consumer electronics, we expect ongoing growth in this new wire bonding market.

This shielding approach was in development a few years ago and has now been broadly adopted by OSAT and IDMs and is utilized in high-volume production. We expect these shielding needs to continue supporting near-term recovery and long-term growth in the Ball Bonding market.

Similar to where shielding was a few years ago, there has recently been significant interest from customers for our verticalfan-out, or VFO, solution. This new opportunity is anticipated to further extend our memory market access over the course of fiscal year 2024.

Over the next few years, we anticipate similar vertical wire approaches will provide a cost-effective alternative to Through-Silicon-Vias, or TSVs, for high-volume 3D applications beyond the initial adoption within the memory market.

The value of VFO stems from its ability to create a complex 3D structure which provides form-factor, power efficiency improvements and significant cost benefits over alternative advanced packaging solutions.

One customer has reported a 27 percent improvement in form-factor and 5 percent improvement in power efficiency along with allowing higher I/O count and better heat dissipation. During the December quarter we booked VFO system revenue of just over $0.5 million to a first moving customer as they refine their production approach.

We are currently engaged with three leading memory customers who are seeking cost-effective 3D packaging approaches. Initially, we anticipate DRAM applications, such as Low Power DDR, LPDDR, to move into low volume production in calendar year 2024 and higher volume production in 2025.

Based on initial customer feedback, there is also strong interest and potential that VFO can be deployed for high-bandwidth-memory applications in the next few years.

Shielding, VFO and the overall growth of high-volume multi-die applications, has increased the growth rate, technology needs and our competitive position within the sizeable Ball Bonding market. We believe we are best positioned to leverage these new market opportunities long-term.

Turning to Advanced Packaging, we continue to actively support several customer engagements in parallel and anticipate additional orders from OSAT, IDM and Foundry customers as we complete key evaluations and qualifications.

In addition to our incumbent position in high-volume semiconductor markets, our advanced packaging efforts allowed us to take share in new high-growth markets including leading-edge logic, mobility and co-packaged optics.

We are increasingly confident on the longevity and market potential of our TCB portfolio and expect to extend the technology well beyond the previously targeted 10 micron pitch. Reaching below this 10 micron threshold will further unlock the flexibility and long-term potential of our TCB solutions.

We increasingly anticipate TCB will be an essential component to leading-edge assembly for many years to come. In addition to finer-pitch capabilities which extend bandwidth and transistor density, our TCB solutions also provide direct copper-to-copper interconnects.

Direct copper-to-copper connections are best-in-class due to low resistance and high performance. Our Fluxless TCB solution is well-positioned to enable this industry breakthrough across high-volume and leading-edge heterogeneous markets. We are confident of our significant technology lead in Thermocompression which we intend to extend further.

Demand for our solutions is rising and we are running several qualifications, with OSAT, IDM and Foundry customers, in parallel. Over the coming weeks, we intend to ship several more qualification systems supporting Fluxless TCB.

I look forward to sharing new product and customer milestones over the next few quarters as we drive broader market adoption. Finally, within Advanced Display, we continue to expand access into the broadening mini and micro-LED markets.

Our growing portfolio supports the evolving display market serving small-format, high-performance mobile displays as well as large-format high-volume and direct-emissive displays. We expect to secure a qualification win for LUMINEX later this fiscal year.

LUMINEX provides a dedicated mini-LED solution which will be increasingly necessary as mini-LED die size continues to shrink. At this year’s Consumer Electronics Show, it has become clear that mini-LED technology is a significant performance enabler for the LCD market.

Mini LED displays have improved over the past years delivering higher levels of brightness and quality and leveraging the large installed base of LCD capacity. As die-size reduces, we are confident the industry will require a dedicated, high-throughput solution such as our LUMINEX system.

Our other key opportunity in display is Project W, and I am happy to report that we are reaching new milestones, expect to ship additional capacity during the March quarter, and recognize revenue during the upcoming June quarter.

As we work to successfully qualify a previously shipped system, we are beginning to ramp production in support of our customer’s long-term capacity plan. Our global R&D, operations, facilities, and supply-chain teams have been working tirelessly to support this major initiative and we look forward to sharing more information over the coming quarters.

It remains a very dynamic and interesting time at the company. As our core market recovers, we are again transitioning into a more optimized and more diversified company. We are very excited to reach new milestones across our growing markets.

Looking through fiscal 2024, we continue to anticipate gradual unit demand recovery and also technology-driven growth as our core market evolves and we continue to extend our foothold in new markets. Customer interest and momentum across our emerging portfolio remains strong.

We look forward to releasing a steady pace of new systems, new features and also announcing new customer and technology wins as the core business returns to a more normalized growth rate.

With that said, I will now turn the call over to Lester who will discuss our financial performance and outlook, Lester?.

Thank you, Fusen. My remarks today will refer to GAAP results, unless noted. While there continues to be headwinds across specific end markets related to macroeconomic and industry conditions, it remains a very exciting time for the Company.

Our core market has shown signs of improvement and we are reaching new milestones with key customer engagements which provide new market access and enhance our long-term financial potential. During the December quarter, we generated $171.2 million of revenue, 46.7% gross margin and $30 of non-GAAP EPS.

Gross margins were aligned with expectations and are anticipated to improve with volume and new product launches. Non-GAAP operating expenses also met expectations, at $69.8 million. Finally, tax came in just ahead of expectations at just below our longer-term, 20% effective tax rate.

Turning to the balance sheet, working capital days increase from 448 to 524 days in the December quarter. Over this period the absolute value of working capital decreased slightly.

Our repurchase program remains opportunistic, and we have increased our repurchase activity sequentially, to $26.8 million during the December quarter, nearly three times the value repurchased in the prior quarter. Additionally, we recently raised our quarterly dividend to $20 per share.

This has allowed us to maintain an industry-leading dividend yield – nearly 1.6% as of our most recent payable date on January 9th. Looking out through fiscal 2024 we continue to invest in the future and are anticipating Capital Expenditures to be $23 million to $27 million.

These investments will support growth over the coming years and will be deployed to enhance and expand operations, facilities, R&D and corporate systems.

Considering the ongoing softness in Automotive and Power semiconductor, which is affecting near-term demand for our wedge bonder solutions, we anticipate revenue of approximately $170 million, plus or minus $10 million with gross margins of 47% in the March quarter.

Non-GAAP operating expenses are anticipated to increase slightly to $72.5 million, plus or minus 2%. We remain focused on controlling and limiting non-critical activities, although continue to ramp headcount, where necessary, to support our growing set of customer engagements.

Non-GAAP net income for the March quarter is expected to be approximately $14 million with non-GAAP earnings per diluted share of approximately $25. In closing, over the long history of the company, we have never enjoyed so many different market and growth opportunities.

The core semiconductor assembly market continues to evolve and is adding more value to the industry. New levels of capabilities are optimizing our high-volume business which will see demand recovery over the coming quarters.

As this core market recovery is underway, we are taking share and expanding our position in leading-edge logic applications, memory, automotive transitions, and high-potential display opportunities which will add diversification and meaningfully enhance free-cash-flow generation over the coming years.

Finally, we are starting to see material opportunities in Advanced Dispense and continue to adopt an active, but cautious, posture in exploring future M&A opportunities. Over the coming quarters, we look forward to sharing new milestones on our progress across this broad set of opportunities. This concludes. This concludes our prepared comments.

Operator, please open the call for questions. .

[Operator Instructions]. Today's first question is coming from Krish Sankar of TD Cowen. Please go ahead..

Hi, thanks for taking my question. I had a couple of them.

Number one, Fusen, I think last quarter you said you expected kind of like a sharp recovery in the fiscal second half of your -- I was wondering, is this still true or is it more a calendar second half recovery versus the fiscal second half?.

Okay. So, Krish, I will say this, I think all Q2 actually weakness in the auto industry and the policy semi-actually impact our Q2 outlook. And also, Q2 is a shorter quarter, right? We have a Chinese New Year.

So actually, Q2 was compared to our original expectation was lower, and we see some push up, but we still actually -- still really feel good about the second half. We still believe the industry recovery actually will make our Ball Bonding recovery more significant.

And in addition, I think we have specific can growth, which second half can do better than first half in a display. VFO, I mentioned in the script, battery -- some customers are battery assembly and also TCB.

So even if you put like Q2 and the second half I just mentioned, I think it's unlikely the push out in Q2 can fully actually in fiscal year over 2024. But some of them probably will go beyond ‘24, but we still -- we are very good that we will be able to achieve our $800 million.

So, to answer your question, I think we are still feel good about the second half, but we do have a push out flow of the Q2. At least a Q2, push out my actually suffer compared to original expectation. But actually, I think we still quite positive to move forward. Hope, I answer your questions. .

Yes, I got it. Thank you for that, Fusen. And then two other quick questions.

One is the timeframe still around April to figure out any kind of TCB qualifications in Taiwan?.

Okay. So, actually interest in our TCB particularly TCB actually has increased significantly. We currently have multiple engagement with OSAT, IDM and the Foundry, including a top two potential customers. And even some company, we have multiple engagement projects.

So, I believe, we feel pretty good, the qualification or the qualification performing well and we expect a qualification win throughout the 2024. Particularly, I think in Foundry process. This actually the engagement projects are advanced new technology, we believe it will take additional quarter or maybe a little bit more to finalize everything.

But actually, we feel good about the progress and the overall momentum of our TCB..

Just a quick one for Lester.

Can you just help us understand what was the backlog exiting the quarter and how much was China as a percentage of sales?.

Well, I think the backlog has been coming down as we've talked about before, from the ramp. It's closer now to the normalized, which is close to our lead times. As far as China, China constitute close to 60% of our revenues in Q1, 46% of it was China headquartered customers.

So, China, it continues to be an important part of our business, and we do see some strength in China right now..

The next question is coming from Dave Duley of Steelhead Securities. Please go ahead..

Good evening, guys.

I was wondering if you could talk about what are some of the signs that you might be seeing now that lead you to believe that your core business is going is in recovery mode? Is it higher utilization rates or customers coming in and asking for capacity? Just talk about what signs or early signs you're seeing for core business recovery..

So actually, we see -- actually we have frequent engagement with our customers. But from an industry point of view, memory actually still recovering, it associated with the memory actually is a phone, a lot of people are talking about AI phone and the PC. We believe these are very smart. And the deterioration, I think that probably can comment later.

But I think this industry, actually, we do believe a new capacity probably is needed some customer wants on fence, but they point to second half, probably, I think we'll have more opportunity, particularly in our Ball Bonder. And we also have some project we believe will be more realized in the second half. So, Lester, you want to comment..

Yes. So, Dave, you're right in terms of utilization. I mean, utilization, obviously, as always, is mixed around different end markets as well as regions. But China, which I mentioned before, it's over 80% is actually closer to the mid-80s now, and we're seeing some real strength there. The other end markets is also doing very, very well.

And also, this is also related to China is memory. For the first time, the last two quarters are over 80%. This hasn't happened since 2022. So, we see a real buildup in utilization in memory, especially in China. So, we feel that, that would help drive our Ball Bonding business in the quarter and in the second half..

Okay. And then could you just talk about what your expectations are for unit volume growth for 2024, overall industry unit volume growth? And then maybe characterize what you think it would be in the first half and the second half.

It kind of sounds like first half unit volume growth is flattish with an acceleration in the back half, but I'd just like to hear what you guys think about first half and second half?.

So, I think that we have a market forecast high single-digit. Well, as you know, I think also right now actually is a little bit weak, and power semi also had some inventory. So, with these two, but if you look at it, in general semiconductor, I think are still positive. So actually, first half was weaker compared to our original thinking.

So steel industry, I think, from our customers and also industry forecast. So, our second half will be -- although, I think forecast is high like single digits, we're still quite positive I think, 6%, 7%, 8%, I think it should still be achieved, including the second half..

So, one way to think about that is the growth rate in the first half is probably under 6% to 8%, and it's probably over 6% to 8% in the back half?.

Yes, I would say that it's probably close to flat in the first half. And then I think, as Fusen said, high single digits in the second half..

Okay. And then you talked a lot about the dispense opportunity. Could you just highlight what sort of revenue opportunity you might have there in dispense in 2024 and 2025? Thank you..

Okay. So actually, we are quite excited with our acquisition dispense unit. Actually, this is a huge market and with the TAM, our TAM is about $2 billion. And actually, have adjacency to our business overlap, including a core like a Ball Bonder, display and SMT. So almost like AV model company, I think they have a need for a dispense.

So, what makes us to excite it is the technology is pretty good. I think we are entering a local micro dispensing, which really need to have a precision dispense and a precision promotion, and a lot of company dispense become a bottleneck.

So, we are engaging with more than 10 customers, some of them are quite significant one, and all feedback are pretty good, quite strong. So, our goal actually '25, we hope we will be able to achieve about '25 to $30 million and the '26, of course, will be even faster growth, right, maybe target about $50 million.

Of course, we actually talking to a lot of customers, and this is an area I think I need to have a breakthrough. Micro dispensing with the capability of a precision, control of expense and motion is really needed in this industry, right? So, we are quite excited..

The next question is coming from Charles Shi of Needham & Company. Please go ahead..

I have a couple of questions. First, I want to get a little bit more color on how the business of the wedge bonding equipment has been trending. I think that you probably have talked about potential moderation for a while, but it does seem like it's -- the softness is a little bit -- I mean, above -- I mean, beyond what you have expected in the past.

So, my question is how much weaker would you be expecting in terms of the wedge bonding equipment business? And the Ball Bonding side does look like there are some signs of recovery, the largest OSAT is increasing CapEx this year based on what they said last night.

How much with Ball Bonding equipment strength offset the wedge bonding equipment witnesses you have? And any color would be great between the puts and takes of your two largest product categories..

So, hi, Charles, we do see, as Fusen mentioned in his remarks, that's what I said. We do see weakness in wedge bonding, particularly driven by automotive. So, I think it has been trending down for 1 or 2 quarters, but we think for Q2, it's going to be a more significant downward. But hopefully, it will recover near the latter part of the fiscal year..

So, Charles, actually, you mentioned the weakness not only a power semi it's also industry. So, the customer with auto exposures, I think they not only push out some of wedge bonder.

So, pushout also include Ball Bonder in that particular company because of -- auto also have a Ball Bonder associated with that, right? So, I would say -- I won't say all the pushout actually are all wedge bonder for this quarter..

Got it. So, what's the -- I know directionally, you do expect a Ball Bonding business. I mean other than what you said about -- yes, there are pushout from the auto industrial sector on the Ball Bonders. But in general, what kind of expectation that the profile of the ramp of the Ball Bonder revenue throughout this year.

It does sound like based on your commentary about the unit growth you were expecting probably more gradual and modest increase of the Ball Bonding revenue for the first three quarters of this fiscal year, maybe a little bit of uptick in September.

Is that the right way to think about it?.

So, I think, as Fusen said, Q2 Ball Bonder is also a little bit weaker than we expected, right? But we think actually Q3 will definitely start seeing recovery from conversations we've had with our customers as well as seeing what I mentioned earlier about utilization rate increasing particularly in China.

So, we think Q3 will definitely pick up for Ball Bonder and definitely Q4 would be much stronger. So, I wouldn't say the first 3 quarters will be weak for Ball Bonder, I would say, Q3 and Q4 for Ball Bonder I think -- we think the recovery would start in Q3 and then really pick up pace latter part of Q3 into Q4..

Got it. Maybe I want to ask one last question. So, you didn't provide a new update on Project W. Just want to check with the management team.

Do you still expect the high-volume production to be in 2025? And what should be to maximize I'm not asking for the timing of the next milestone, but what exactly should be the next milestone?.

So, Charles, I think for Project W, the next milestone, I think, as Fusen mentioned, we've shipped 1 system machining more capacity for the customer. I think the next milestone probably would be the qualification of the initial pre-mass production tools, which have been shipped. As far as -- whether we believe mass production will kick in, in 2025.

A lot of that has to do with the customer, right? And the readiness of the entire supply chain for Project W. So, we still see -- I mean, for '24, '25 preproduction tools going in, and we're getting ready for the ramp, which could be the latter part of '25, '26. But again, a big part of it depends on the customers' readiness..

[Operator Instructions]. The next question is coming from Craig Ellis of B. Riley Securities. Please go ahead..

Thanks for taking my question, and good evening, guys. So, I wanted to just go back to some of the earlier comments and try and stitch together what we're saying about fiscal '24. So Fusen, I think early on, you said that you think $800 million in revenues is possible.

And it seems like with your traction in the spend at $25 million to $30 million, that's going to drive about 60% of the incremental year-on-year growth.

So, does that mean that the balance of the growth is from Ball Bonders or wedge bonders? Or do we have something hitting with advanced display and TCB this year?.

So, actually, I make a comment. I think '25, we expect expense probably have a really momentum because this year '24, we have a lot of engagement with the same customer, right? So earliest, I think traction is going to be '25, which are $25 million to $30 million is what we're looking for.

And what I mentioned in the second half, I think in addition to the Ball Bonder recovery, actually, even a recovery compared to the peak, we even not 40% of the peak volume yet. So, gain Ball Bonder will have a lot of long way to go.

So, in addition to the Ball Bonder recovery in the second half, I think we also expect many things we have a VFO, we expect displayed, right? And we have other areas to grow, as I mentioned in my script, so I hope I....

Okay. That helps. And then I wanted to dig into another comment. You mentioned that it's possible that you'll see some auto battery shipment acceleration later this year for I believe it was wedge.

And I wanted to get a sense for what you thought the magnitude of that would be and how the linearity played out in the back half of the year?.

Yes. So, Craig, I think the magnitude is not huge, but it is significant. This is the first big buy we've had from the customer for quite a while. I think as well as far as linearity is concerned, I think we believe that it will be -- there'll be some in this quarter, but mostly it will be in the second half of the year..

Yes. And then lastly, if I could sneak in one more. Certainly, some encouraging signs in China memory. The question is for Korean memory and U.S. memory companies. What's your expectation for when we get back to 80% plus utilization rates that can benefit the business in those geographies with those customers? Thank you..

Well, I think right now -- well, when you say U.S. memory companies, U.S. memory companies of operations in China as well, right? So, I think utilization in those geographic areas is again, right now in the -- not specific to memory, but it's probably in the mid-60 to mid-70.

So, I think we hope that by, again, there is a recovery in memory prices, we hope that by the second half, that will start picking up for everybody..

Got it..

At this time, I'd like to turn the floor back over to Mr. Elgindy for closing comments..

Thank you, Donna, and thank you all for joining today's call. As always, please feel free to follow up directly with any additional questions. This concludes today's call. Have a great day, everyone..