Steven Moore - CFO, VP, Treasurer and Secretary Todd DeBonis - CEO, President and Director.

Charlie Anderson - Dougherty & Company Brian Alger - ROTH Capital Partners Richard Shannon - Craig-Hallum Jaeson Schmidt - Lake Street Capital Markets.

Good day, ladies and gentlemen and welcome to Pixelworks, Inc.'s Third Quarter 2017 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Mr. Steve Moore..

Good afternoon and thank you for joining us today. With me on the call is Todd DeBonis, Pixelworks' President and CEO. The purpose of today's conference call is to supplement the information provided in our press release issued earlier today announcing the company's financial results for the third quarter of 2017.

Before we begin, I would like to remind you this remarks we make on this call, including those about our projected future financial results, economic and market trends and our competitive position, constitute forward-looking statements.

These forward-looking statements and all other statements made on this call that are not historical facts are subject to a number of risks and uncertainties that may cause actual results to differ materially.

All forward-looking statements are based on the company's belief as of today, Tuesday, November 7, 2017 and we undertake no obligation to update any such statements to reflect events or circumstances occurring after today.

Please refer to today's press release, our Annual Report on Form 10-K for the year ended December 31, 2016 and subsequent SEC filings for description of factors that could cause forward-looking statements to differ materially from actual results.

Additionally, the company's press release and management's statements during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms, including gross margin, operating expenses, net income loss and net income loss per share.

These non-GAAP measures exclude amortization of deferred revenue share value adjustment, inventory step-up and backlog amortization, amortization of acquired intangible assets, acquisition related costs, stock-based compensation expense, restructuring expenses, fair value adjustment on convertible debt conversion option, and discount accretion on convertible debt fair value.

With the exception of stock-based compensation all of these adjusting items are related to the acquisition and integration of ViXS Systems. We use these non-GAAP measures internally to assess our operating performance.

The company believes these non-GAAP measures provide a meaningful perspective on our core operating results and underlying cash flow dynamics but we caution investors to consider these measures in addition to, not as a substitute for nor superior to, the company's consolidated financial results as presented in accordance with GAAP.

Included in the company's press release are definitions and reconciliations of GAAP to non-GAAP net income loss and GAAP net income loss to adjusted EBITDA which provide additional details. With that said, I'll now turn the call over to Todd for his opening remarks..

Thank you, Steve and good afternoon to everyone on today's call. As reported in today's press release, third quarter revenue was $18.8 million at the high-end of our $18 million to $19 million guidance range. This included the expected $2 million contribution from a partial quarter of ViXS.

Going forward we will refer you to the ViXS product lines and solutions as Pixelworks video delivery business. Excluding the EOL contribution in previous quarters, organic revenue in our core business grew 7% sequentially and was up 38% year-over-year.

Gross margin expanded to 54.9% in the quarter and we diligently managed operating expenses to a better than expected level resulting in a non-GAAP earnings of $0.03 per share above the high-end of our guidance.

Our results marked the fourth consecutive quarter of profitability on a non-GAAP basis and substantial year-over-year improvement on effectively every financial metric. As previously announced during the quarter we took plain steps to further streamline the entire organization following the acquisition.

These decisive actions included the elimination of multiple redundant and nonstrategic expenses which enables us to rapidly realize approximately $4 million in annual cost synergies.

Looking at our three end markets of projector, mobile and video delivery we are pleased with where Pixelworks's positioned within each market to capitalize on distinctive opportunities. In fact the trends in these markets are accelerating the need of our visual display processing technology and advanced video delivery solutions.

In our projector business, revenue grew 10% sequentially and nearly 40% year-on-year to $16.5 million. I want to highlight that the third quarter revenue represents a multiyear high in our core projector business after adjusting prior quarters for the contribution from EOL products.

The drivers of this growth continue to be a combination of normalized demand environment and increased market share at our key customers which have been consistently outperforming the broader projector market.

In addition to strong year-over-year revenue growth, we also continue to realize improve margins and profitability following the streamlining of our product line last year. ASPs remain favorable and we believe that our current material margins are sustainable for the foreseeable future.

Although the growth rates in our projector business will moderate beginning in the fourth quarter due to the higher quarterly calls, our bookings continue to be strong. Channel inventories are solely which we expect to support order demanded in line with typical seasonality.

In our mobile business, revenue declined sequentially as a result of an anticipated product transition by our lead mobile customer. However, we expect revenue which during the fourth quarter as ASUS ramps its next-generation tablets that incorporate Iris display processors.

The mobile market continues to move in the direction of Pixelworks core strengths. As leading OEMs are increasingly incorporating advanced display and video processing capabilities such as high dynamic range or HDR, wired color gamut and adapted displays into their newest generation devices.

While the two market leaders are not our primary target, we have more integrated in-house design approach. Their adoption of features like two-tone and mobile HDR certification is clearly influential.

Importantly, the technology leaders put increased pressure on nearly all other OEMs and specifically on their flagship models targeting developed markets. We have recently seen a dramatic shift in interest to incorporate similar features and functionality in the future devices.

Today a few if any of the fast followers have the fundamental know-how or internal design capability to implement advanced display processing on their own.

Adding to the increased interest of our targeted OEMs to adopt advanced display capabilities is the increased availability in emphasis being placed on higher quality content from the disruptive providers of streaming content.

For example, Amazon and Netflix are actively promoting premium content services that require a certified or white listed device with a high performance display and associated display processing pipeline in order to view their premium mobile content.

Subsequent sampling our fourth generation Iris mobile processor early in the fourth quarter, we verified the new chip and have since been supporting multiple evaluations with targeted OEMs.

As I discussed on last quarter's call, this device was specifically designed to overcome the key hurdles for OEM adoption including significant improvement in power, size and cost in addition to incorporating new features as compared to our third generation device.

However, I want to emphasize that our fourth generation does not replace the third generation device. The respective generations have meaningful different feature set and we currently have active engagements with prospective customers for both generations.

Given the current design and activity for both the third and fourth generation of Iris, we expect to ramp into meaningful volume production in mid-2018 in support of multiple new mobile OEM customers. Turning now to our recently acquired video delivery business.

Revenue was $2 million which was in line with our expectations for the partial quarter of contribution. As previously mentioned, we realigned our resources in September to focus on key consumer customers in Japan and our OTA or over the air streaming initiatives.

Combined with our crisp integration efforts which we anticipate completing by year-end, we remain confident in our ability to drive significant revenue and operational synergies.

The current market dynamics of accelerating declines in traditional pay-TV subscribers, rapidly growing retransmission fees and new attractive OTT alternatives are creating a unique opportunity for our OTA streaming solutions.

The OTA ecosystem consists of early adopter customers, software solution providers and cost competitive contract manufacturers and Pixelworks OTA solutions are gaining increased attention.

Today there are several single, dual and quad channel solutions based upon our SOC's that are currently available through leading retailers in advance of the holidays.

To close out my prepared remarks, the opportunity for Pixelworks technology to directly address prevailing market demand for differentiated video processing solutions has never been more tangible.

More importantly both mobile display processing and OTA streaming represent dynamic growth potential and I believe the company is uniquely positioned to aggressively pursue these two distinctive and rapidly emerging market trends.

As a result, our recent integration efforts we are now critically focused on realizing meaningful inflection points in both markets in 2018. I’ll now turn the call over to Steve to review our third quarter financials and guidance for the fourth quarter in more detail.

Steve?.

Thank you, Todd. Revenue for the third quarter of 2017 was $18.8 million this is compared to $20.7 million in the second quarter of 2017 which included $5.1 million of EOL revenue and revenue of $13.7 million in the third quarter of 2016. Revenue in the third quarter of 2017 reflected a 39% year-on-year growth in our digital projection business.

The breakdown of revenue during the third quarter was as follows; revenue from digital projection products was approximately $16.6 million, mobile revenue was approximately 190,000 and revenue from video delivery was 2 million.

Non-GAAP gross profit margin was 54.9% in the third quarter of 2017 compared to 54.4% in the second quarter of 2017 and 48.6% in the third quarter of 2016. Non-GAAP operating expenses were $8.9 million in the third quarter of 2017 compared to $7.6 million in the previous quarter and $6.8 in the third quarter of 2016.

Q3 operating expenses included the credit of approximately $1.3 million related to the previously announced codevelopment project with a large projector customer. Adjusted EBITDA was $2.3 million for the third quarter of 2017 compared to $4.7 million in the second quarter of 2017 and 670,000 in the year ago quarter.

Reconciliation of adjusted EBITDA to GAAP net income loss may be found in today's press release.

On a non-GAAP basis the company reported a net profit of 976,000 or $0.03 per diluted share in the third quarter of 2017 as compared to a net profit of $3.2 million or $0.10 per diluted share in the prior quarter and a non-GAAP net loss of 438,000 or $0.02 loss per share in the third quarter of 2016.

Moving to the balance sheet, cash and cash equivalents decreased sequentially by $5.9 million to approximately $26.3 million at the end of the third quarter.

This decrease was primarily due to the payment of approximately $5 million of debt assumed as part of the acquisition of ViXS which was partially offset by approximately $2 million in cash assumed in the acquisition. The company also paid approximately $1.5 million in Q3 for the asset related to fourth generation Iris device.

Other balance sheet metrics include days sales outstanding of 24 days at quarter end compared to 25 days at the end of the second quarter. On an annualized basis, inventory turns decreased to 12.2 times in the third quarter compared to 17.2 times in the prior quarter.

Reported inventory as of September 30, 2017 included approximately $1.4 million of purchase accounting step up which is expected to largely be amortized over the next two quarters. Turning now to guidance for the fourth quarter of 2017 we expect revenue to be in a range of between $17.5 million and $18.5 million.

We expect non-GAAP gross margins of between 55% and 57%. Operating expenses on a non-GAAP basis are expected to be between $10 million and $11 million unlike the third quarter no credits – related to the Projector codevelopment project are expected to be recorded in Q4 of 2017.

We expect non-GAAP EPS to be in the range of between loss of $0.05 per basic share and income of $0.01 per diluted share. With that we will now open the call for questions.

Operator?.

[Operator Instructions] And our first question comes from the line of Charlie Anderson with Dougherty & Company. Your line is open..

Todd you had some interesting comments on mobile, you are very specific that you're having good design interaction for both third and fourth generation Iris so that was very good to hear.

I wondered if maybe you could just maybe help us quantify what that means may be number of customers what you’re seeing in design ends anything in terms of being able to quantify what meaningful means in terms of meaningful production and then maybe what's driving some of those design ends would also be helpful and then I got a follow-up?.

So listen, I don’t want to quantify too much I think let me first comment on past numbers that I put up I said - we’ve targeted probably less than a dozen key OEMs.

I have been pretty clear that the leaders in the industry have a great deal their own R&D investment the display processing pipeline that would say that the others are the ones we're focused. I've turned them as fast-forwards in some cases.

That marker may not be appropriate for one or two that we're engaged but I would say that we're still in discussions with all the customers I mentioned in the past or the quantity of them.

And I would say we have designed in traction and that's what I'm referencing in my comments with half dozen customers and at least that many programs some customers more than one program.

I also mentioned that - I think there is there is a lot - based on my own comments I’ve stated that we needed to reduce the barrier of adoption of our devices and how to do that is to make it easier to integrate and easier decision, easier design, less power consumption because they're all extremely focused on overall power budget of the phones and of course they’re all costs sensitive.

While with that said, the two things we still have some strong interest in the third generation of Iris the feature sets of the two devices.

Now we come out said what Iris 3 is it feature set I have not publicly announced the feature set of Iris 4 I have not prepared to do it yet .But what we do say is that the feature sets are different and what we also said is that fourth generation of Iris is the lower-cost lower power budget it’s a 20-nanometer and part of the way we receive the lower cost is by changing the feature set up and it wasn’t just eliminating features from Iris 3 it’s actually some features in the fourth generation of Iris that do not exist in the third generation so what you see is a few OEMs are targeted and strongly interested in the features of the third-generation and some are very interested in the lower cost set of features lower power set of features of the fourth-generation.

And so I was a little surprised by that actually that we had as much traction in the third generation as we do but I'm happy. So doesn't really quantify for you maybe as far as quantify of customer I think it does but beyond that still little too far out there for me to give you too much more detail on quantity of the ramp and color on the ramp..

Got it - sorry go head..

Well I just going to give you a piece of color which is the engineering engagement we have from these customers is quite a bit different than what had been up to this point.

Once the leaders in the industry and the most recent leader coming out with their new phones, the uptick in interest of dazzlers high-quality displays and supporting HDR video have gone up dramatically right.

And so we certainly knew we needed a catalyst beyond just or having us lower the barriers of entry, but I didn’t realize how much it would change the dynamic force. So it has dramatically changed the dynamics these guys - they’re moving as fast as they can I think they probably wish they would started earlier at this point..

And then so for the follow-up I was wondering about OTA kind of cutter chip.

I think you talked about been on some products for the holidays but then as I think about next year and sort of the pipeline of opportunities there I wondered if you could give anymore color I didn't make any comments about design ends there like you did for mobile but maybe just roughly where we stand with that pipeline?.

So what is available is there is early adopter products from new VO - I think [indiscernible] has come up with a recent product and antenna direct has their clear stream product our house. Come out of the recent product and Antennas Direct and their ClearStream product.

Those were all active engagements prior to our acquisition that now are out and in the channel and they are invest by stores, they are in Walmart stores and they are online.

There are other programs that were designed into that have not been launched yet and so I’m not going to talk too much about that some of those were in process at the acquisition and we closed recently and some have just.

One of the things we did and we brought in is I think through personally through a half dozen visits to couple large OEMs large chipset partner providers that we could be on referenced designs with and software ecosystem partners to make sure that everybody understood either they knew about us already they knew about the acquisition and if they didn’t know about us they knew how focused we were in this space and what our roadmap looks like and what our vision for it was.

And through all those meetings I have a very excited ecosystem to engage in the space, that market is turning dramatically and it really has nothing to do with the technology it has to do with the forces going on between what the pay-TV operators currently are seeing in the market what the new disruptors are doing to the market and the changes going on there.

And yet creates a really unique opportunity for us over the next 18 to 24 months. So there new designs wins to be specific we’ll roll those out.

Listen I wanted to be a little bullish on this call it’s been very patient investment crew our investors have been long with us even probably before I got here we are starting to turn the corner I wanted to make sure that they heard it as soon as I could give them confidently that we’re turning the corner there.

And but I still at the end I want to make sure that everybody knows I'm not going to get too far out in front of our customers. And I'm not going to talk about their launches before they launch and I'm not going to talk about how they differentiate the product before they launch, but I wanted to give some color..

And our next question comes from the line of Brian Alger with ROTH Capital Partners. Your line is open..

Todd I'm wondering if you could maybe help us understand I mean obviously there is a lot of things going on lot of the stuff that might come in might not come in between the mobile opportunities with Iris and then obviously on the OTA and fixed side.

As we look out I mean obviously fix a size of revenue run rate that this little bit higher right now if we’re looking at 2018/2019 and beyond if you had a guess which one had a bigger opportunity for Pixelworks how would you have us think about those?.

Well I think today both of our growth initiatives like this is how our – I’ll frame it like this we had a dramatic year of year-over-year growth in our core market of projector right I think the first three quarters we grew in mid 30s it will kind of year-over-year comparison fourth quarter so it’s not going to hit that high but when average out the whole year it will be you know in the high 20s probably year-over-year growth for projector.

This is in a flat market so we were taking market share mostly by the intact rate and the market share we took our largest customer. But we also took it elsewhere in a few spots. I expect that we will still grow faster than the flattish market in projector in 2018, but I expect this the growth to slow down quite a bit right.

We’ve got quite a bit out of it we’ll get a little bit of growth material margins et cetera will be maintained it will be a nice healthy business. The other two businesses will allow the company to continue to grow at those type of growth rates and so I expect but this is when I do the comps I take out the EOL okay right.

So if I take out the EOL I still expected 2018 will grow with a slowing core Projector business will grow in the upper 20s year-over-year. And then right now I see the potential for accelerating growth rates in 2019 and 2020 - accelerating growth rates and let me be clear on that accelerating growth rates right yes..

I understand and if either Iris or make us so successful in 2018 I think that is very logical conclusion because you'll be on design path for some very, very large markets.

At this stage without getting ahead your customers and I don't want you to be put in a tough spot I am just curious if you had to guess today which opportunity has a higher probability of delivering that growth is there a way to handicap that at all or they’re pretty much equal?.

That's a tough one..

You afraid of your two kids?.

Isn’t it always the youngest of your two children that are always the ones that you cuddle. So certainly the Pixelworks video delivery business is the shiny new penny.

And the dynamics there are really interesting and because it’s with a new set of customers and new set of the issues to overcome I’m personally spending a lot of time with it but I do not want to take away from the mobile team.

The mobile team has just the core team that we have here working on mobile there have been naysayers for three years and you go look at the core support and marketing and sales team that just kept pushing and pushing and pushing because we were out there all by ourselves for most of this time to see them have to pull and the potential for the success rate.

I’m extremely excited for the Pixelworks' team. So right now – the potential in mobile is big but it is with a fickle difficult crowd that everybody knows the broad economics of the mobile industry and beyond the two leading suppliers.

There is very little profitability within the industry you can have an individual a company that has a good growth here and I'm sure that they were profitable that year. I mean I could look at Oppo and Vivo last year and I could look at Huawei this year.

But in the aggregate that group that we're targeting half even though there is 1.5 billion units it is a tough, tough business and it creates a dynamic that can work for you, but work against you. Right now it's working for us because they all want to catch up and they see us as a vehicle to catch up.

How we continue to stay the apple of their eye is always a difficult challenge and it can turn our heartbeat. So if you have to remember that and I spent a lot of time in the business over the last 12 years and it just its never get too far out in front of yourself in that space..

Understood. Well it looks as though things are shaped up and obviously the healthy projector market gives you a great cash generating business to a developing institute. So keep up the good work I appreciate the color thank you..

And our next question comes from the line of Richard Shannon with Craig-Hallum. Your line is open..

I jumped on the call a little bit late we had a bunch of earnings, earnings tonight here's so I may have missed some prepared comments so bear with me if I'm repeating things here but Todd I guess maybe asking on the mobile opportunity and some of your increased enthusiasm for some volume wins next year.

Did I catch your comments or am I characterizing your comments correctly as companies OEMs have been testing and potentially putting designs together during the course of this year, but once the largest, one of the largest guys came out with their new phone here recently it sounded like they kind pulled the trigger or accelerated designs or am I characterizing this right and if so if you can add any more detail to the tenor and the pace of change in those conversations as phone came to market?.

Sorry I think you’re characterizing it right I mean what I would suggest is we had a – when you're selling a, it’s not that most of these customers we focus on didn't have display processing but it was effectively given them to by their suppliers they didn’t really tailor it, it's what they got out of their AP vendor and what they got out of their display vendor with VDI.

In some cases a couple of the larger guys might dictate the display pipeline attributes, but I wouldn't say they really focused a differentiating there. And what you saw was you’ve seen reviews of some of these guys that they got panned on the display capabilities.

I mean I don’t want to call these my customers out to light so I'm not going to say anybody by name, but if you've read any of the recent reviews of some of the flagship phone that come out the last six months that work the top to that I’ve called out.

They have all been troubled and plagued with color calibration issues, display accuracy issues, the quality of their video display, nobody cared before because a couple of things.

People weren’t pushing content the users were okay with crappy video content and scale back because most of the service providers scale back the throughput but now it's changing from both the providers wanting to provide high-quality content and the leaders in the industry really honing their capabilities in the display processing pipeline in combination with very high quality screens.

The fast followers woke it's important to them now right and so it's not like we never had any conversation with these guys we had been pushing on them trying to tell these customers the importance of what we do probably before I got here in some cases with these customers right and I've been here almost I don’t know 18-20 months.

So but now that push is a combination of pull and push that’s an engagement and those engagements what I'm effectively alluding to on this call was prepared remarks and the press release is those engagements are far enough along that I'm going to go out and say that they will consummate as design wins they will be public and we expect to have meaningful ramp in the second half of the year..

Todd if I could kind of correlate with the statement here in just last few sends versus a response to ones of Brian’s question you characterized some of these customers as fickle which might suggest kind of varying timeframe here.

But your just last comments suggested the fair degree of certainty and I think you kind of describing cohesiveness between an OEM and a potential service provider kind of pairing a phone with a service. So that seems to suggest an ecosystem that’s coalescing and would suggest timeframe that may hold here.

So I want to take your temperature on the extent to which you think there's timeframe fungibility with that second half ramp versus something later?.

So let’s be clear on my comment with Brian, when I said fickle that conversations was in regards to a longer-term outlook of both the mobile opportunity and code cutter in which one did I thought would have the greater impact on the company.

And it's hard to pick they both would have great impact what I tried to bring up was the fact that it's - that's a long ways out to predict the behavior of the mobile customers who can be fickle right. Right now I said they’re working for us because they are rapidly moving towards the need to have this technology in there.

If out in 2019 they’ve all moved to something else it could be harder right now, right now I think this is a multiyear trend - I have been in this business too long to say for sure.

Now short-term these customers would like to react as soon as possible and in some cases they’re trying to even be the back half of 2018, but if fast forward the nature of them is the reactionary, they're not out plotting and planning ahead.

And so sometimes you can only react so fast and you have to get on that train and when their next phones are available and how soon you can get there. So their behavior is changed quite a bit how fast they can react is the question. I’m feeling pretty comfortable in the second half that it will be a meaningful step up in our volume.

I don't want you guys to get too far ahead of us right because many of the guys were focused on have - some of them have very high volumes but the volumes are from phones that are on the low to mid end they all have flagship models but don't assume just because we get in design entire end where they need to compete with us.

Remember even though we've lowered the barriers of entry the cost of our device they usually don’t put our device in with a crappy screen. Okay, so there's other elements that they have to spend to come out with the features and functionality we push okay and we enhance.

Now we do believe we can take a reasonable screen that’s a lower cost than some of the higher tier screens and get a much better performance out of it. So how far down their product line we can hit with our device I think still remains to be seen. These initial programs were focused on a more flagship oriented..

Appreciate all that detail Todd, thanks for that.

Last two quick questions from me Todd just want to verify that you said you thought you could see growth excluding EOLs kind of growing in the high 20s rating in calendar is that – did I catch that correctly?.

That's correct..

The second quick question from me is especially as we got a new business here as Pixelworks coming into the fold here wanted to see if there's any way you could characterize what would you expect normal seasonality would be in that business as we get in the first calendar year.

I would assume it will be down some because its just some holiday purchasing, but just want to get a sense of what….

To be frank the revenue that we've inherited is so low it’s hard for me to even say that they’re seasonality to it. The revenue is a mix of these early adopter OTA customers.

This large consumer - I guess I can call him out as sharp because they have a public announcement together and those guys are just ramping their 4K PVR set-top boxes in Japan right they’re just starting to ramp so those two elements are a small part of it but it’s just starting.

Probably the main part it’s just - this is a company that was around I want to say 17 years before we acquired it. They had tried to do you - went from - their highest revenue peak they were focused on multimedia PCs and doing video decoding and transcoding within the PC environment for Windows Media.

They migrated that to a more professional decoder and service provider video delivery business where they’re transcoding for the hospitality industry and large service providers. And then migrate it towards this more consumer oriented play at the end. A great deal of the revenue is based upon all that history of their past markets.

You know it's low, it's still got some life to it we’re not going to just pull the legs out from underneath it and end the life it. I’m going to support those customers in sort of a legacy mode. We are totally focused with the remaining resources on OTA and the consumer electronics business in Japan period.

And so I told all the customers that are effectively not getting any new development directed towards them that I’ll support their current programs but we're just not in that business anymore. And I’ve talked to multiple CEOs about it they know where we stand.

So with that said, I'm not sure there is much seasonality in the existing business it’s too early to talk about that.

We’re totally focused on these new businesses as they grow there may be some seasonality in their business but I'm hoping they are just on a fast growth rate that usually when you're on a high growth rate you don't see much seasonality you just growing..

That’s kind of what I expected you kind of pick up on my follow-on question that so appreciate that. That all the question from me guys. Thank you..

And our next question comes from the line of Jaeson Schmidt with Lake Street Capital Markets. Your line is open..

Most my questions have been asked already but just want to look at gross margin obviously really strong in Q3 and expect to be strong in Q4.

I know that mix driven but how should we think about the opportunity to expand gross margin further from here?.

Well Q4 does - we do expect it to be a little above Q3 simply because of the mix that you just mentioned a very favorable mix. We continue to have gross margin opportunities as we increase the amount of excess product in our mix through the year. And some of that will be offset perhaps most of it being offset by somewhat lower mobile gross margin.

We do expect gross margins to always be above 50% and more in line with what we've seen in the last couple of quarters..

Always there is a long time Steve - its for the foreseeable..

Yes, for 2018 is what I was referring, yes, thank you.

Does that answer your question?.

It does. Thanks a lot..

Thank you. And I’m showing no further questions at this time. I would now like to turn the call back to management for any closing remarks..

So once again never dull moment at this company. We are having a lot of fun here. We’ve really enjoyed integrating the ViXS team into the company. They’re a group of like-minded people and it feels like we've actually been together a lot longer than we have and we’re already pouring in the same direction.

So I’m going to leave it at that, thank you very much..

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day..