Neonode Inc. Q2 FY2021 Earnings Call

Hello, everyone. Thank you for standing by and welcome to Neonode's Second Quarter 2021 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session with the company's covering analysts. Thank you. And at this time for opening remarks and introduction, I would like to turn the call over to David Brunton, Neonode's Head of Corporate Investor Relations. David, please go ahead and start the conference.

Welcome and thank you for joining us. On today's call, we will review our second quarter 2021 financial results and provide a corporate update. Our update will include details of customer activities, technology developments, and other items of interest. On today's call is our CEO, Urban Forssell; and our new CFO, Fredrik Nihlén. Fredrik joined the company last week and will provide a brief introduction of himself in just a few minutes. He will also present the financial results of the company for the second quarter. Before turning the call over to Urban, I would like to make the following remarks concerning forward-looking statements. All statements in this conference call other than historical facts are forward-looking statements. The words anticipate, believe, estimate, expect, intend, will, guide, confidence, targets, projects, and other similar expressions typically are used to identify forward-looking statements. These forward-looking statements do not guarantee the future performance that may involve or be subject to risks, uncertainties, and other factors that may affect Neonode's business, financial position, and other operating results, which include, but are not limited to, the risk factors and other qualifications contained in Neonode's annual report on 10-K, quarterly reports on 10-Q, and other reports filed by Neonode with the SEC, to which your attention is directed. Therefore, actual outcomes and results may differ materially from what is expected or implied by these forward-looking statements. Neonode expressly disclaims any intent or obligations to update these forward-looking statements. At this time, it is my pleasure to turn the call over to Urban.

Thank you, David, and also from my side, welcome to this call. It's a pleasure being here with all of you. We are ready to present second quarter earnings and also share some updates on our business and our strategies. Presenters during this call, will -- besides Dave, who you already met, and myself, will be Fredrik Nihlén, our new CFO. I'll hand over to Fredrik and let him take a couple of minutes to introduce himself. Thank you, Fredrik.

Thank you, Urban. I'm excited to join Neonode. I have worked in finance since I graduated in '08. I started auditing and accounting, moving over more and more to consolidating, analyzing, and reporting. My last three positions have been as the leader of the finance department in the companies I worked for. Latest as the Finance Director for Nordics at IFS. IFS develops and delivers enterprise software to customers around the world who manufacture and distribute goods, build and maintain assets, and manage service-focused operations. With a turnover of SEK 1.7 billion, about US$200 million, the Nordic region spans 24% of IFS’ total net revenues. Before IFS, I was the Group CFO of Cinnober, listed on First North NASDAQ in Stockholm. Cinnober was a Swedish fintech company with state-of-the-art software that developed software for the heart of the stock exchange: the trading system and also redesigned the clearing system through the clearinghouse. Real-time clearing means real-time trade management and risk calculations. NASDAQ acquired Cinnober in 2019, and I had the finance integration into NASDAQ, and Cinnober was delisted during that time. My goal is to transform the finance team at Neonode to be a true business partner and to be a natural part of ongoing business decisions. One prerequisite for this to happen is to have data, structures, and algorithms so they can be applied in different ways, turning into information so that decisions can be made from knowledge. The world is always changing, and that means finance needs to adapt to that change. Therefore, we always need to develop and strive to be more efficient. There is always a better way. As I said, I'm excited to join Neonode. I think Neonode has great technology and great potential. Back to you, Urban.

Thank you, Fredrik. And again, welcome to Neonode and to the team. I look forward to working with you here. As an upfront summary and highlights on what we will present on this call, I want to review the following points. First one is that, it should be clear, and we repeat that we continue to execute on our strategies and build our business pipeline. We will share some positive updates about our business today, and the company management team is encouraged by the progress we are making. Of course, like many of you, we are eager to see the business of Neonode grow, and we are working hard every day to do so. However, we have some good results to share with you in this call, and you can find more details in the report and in the 10-Q. Like many others, we are still affected by the COVID-19 pandemic, and it negatively impacts our business; that should be clear. We are directly affected in terms of lockdowns and issues in traveling and meeting with customers. We are also indirectly affected, particularly for our license business with automotive customers and to some extent, printer customers due to the shortage of semiconductors worldwide. Additionally, we see effects from a general economic downturn, though despite these headwinds, we are quite satisfied with the progress we have made during the first half of this year, and our target is clear: to grow the business. In terms of key performance indicators for the second quarter, we grew our revenues by 127% compared to the same quarter last year. I think this is a solid result. Personally, of course, I was hoping for more, but under the circumstances, we think the progress is robust and it proves that our strategies are working and that we are on the right track. The demand for our contactless touch solutions, which is our main focus, and our Touch Sensor Modules— the products where we have embedded our zForce technology into standardized sensing modules that we produce in our own subsidiary in Pronode here in the West Coast of Sweden— is also picking up. Asia is leading the way with customers in Japan, South Korea, Taiwan, and China. However, we also see growing interest from customers in Europe and North America, which is very, very positive. Our license revenues have recovered well after the dip we saw last spring when the pandemic hit us. It was indeed a very slow period for both printers and automotive sales. But during the second half of last year and the first half of this year, things have improved considerably for us. We see changes in the product mix, but overall, it's good recovery, and we are at a good level now in the second quarter of this year. These are some of the highlights of the call, and now I will turn the word back to Fredrik, who will take us through some further details on the financials. So over to you, Fredrik.

Thanks, Urban. You can find our second quarter earnings release and 10-Q available for download from the Investors section on our website neonode.com. For the second quarter, our total revenues reached $1.7 million. That is an increase of 127% compared to the second quarter of the previous year. Revenues from sensor modules increased from low levels of sales by 439%. We can see that sensor modules revenues have a positive trend, especially in APAC. Operating expenses for the second quarter increased by 38% compared to the same period last year and by 9% compared to the previous quarter. During the second quarter last year, costs were low due to the pandemic. We received governmental support while also implementing cost measures, making us very cost-conscious. We are now investing in expertise, hiring skilled personnel who will aid in our continued journey. The cost level we see in the second quarter this year is more in line with expected cost levels. Our total gross margin for the second quarter of 2021 was 87% compared to 84% for the same quarter of 2020. The increase is related to higher product sales with better margins. In the second chart, you can observe a trend of improved margin on our products. The main explanations are: one, the margin from Q2 2021 is not depressed by lower margin AirBar sales; and two, we have updated the price list for our Touch Sensor Modules. We expect to see an increase in margins in the coming quarters. Long-term, as volumes continue to rise, we may see pressure on margin. However, in the short to medium term, we are confident that our margins in the project business will be at least at the levels we witnessed during the second quarter. Net cash used in operating activities during the second quarter of 2021 was $1.4 million. Compared to the previous quarter, net cash from operating activities decreased by 29%. The negative cash flow has actually decreased compared to previous quarters due to one-time items. We expect the cash to last for the next 12 months.

Thank you, Fredrik. Now for the next part of this call, I want to review with you in a little more depth our strategies and our business development. First of all, I'd like to share what our vision is: to transform the way humans interact with machines. This has been at the core of the company since its foundation. Twenty years ago, we were founded with a focus on developing innovative smartphones. Since then, we have developed touch solutions for e-readers, printers, and other innovations, always focusing on transforming and improving the interaction between humans and machines. We continue to work towards this vision in everything we do, every day, every week, every month. We have a broad technology portfolio and are working with touch, gesture control, object detection, and scene analysis using cameras, and since last year, we have increased our focus on what we call contactless touch. Our technology and offerings extend across multiple segments. Our main focus is elevators and interactive kiosks. However, we also continue to work with automotive applications, medical applications, military avionics, consumer electronics, and to some extent, digital signage. Our main emphasis, however, since last year and continuing is centered on contactless touch for elevators and kiosks. I will elaborate further on this topic. What is contactless touch? For us, it means contactless touch-like interaction with a display, keypad, keyboard, or button. You hover your finger in front of the display and click, swipe, scroll, but you do this with finger gestures in mid-air. This is what we mean by contactless touch. Touch interfaces are very straightforward and intuitive, and many of us are accustomed to interacting with machines through touch. This is a specialized variation where the interaction occurs in mid-air in front of the display or above the keyboard—no touching. Touch Sensor Modules, originally developed for touch applications, are also intended for gesture sensing, making them an ideal fit for creating good user-friendly contactless touch interfaces. Applications can be found in various types of kiosks and elevators. Why is this interesting? We have discussed this on previous earnings calls. There are numerous bacteria, viruses, and other contaminants on touch screens and keypads in public spaces, which is not the most appealing thought. However, the COVID-19 pandemic has heightened awareness on this issue. We believe that contactless touch is excellent for health and safety, particularly relating to viruses like COVID-19. Furthermore, for many years, various viruses and bacteria have been ubiquitous around the world. Our contactless touch solution can enhance customer satisfaction, provide a better user experience, and add value to the brand. Why do we think we have the edge here? Neonode and our Touch Sensor Modules are simple, intuitive, easy-to-use, and cost-effective compared to many other solutions. If you examine the cost of ownership along with retrofitting, we have a compelling offering. There are, of course, other ways to achieve a contactless touch user interface. I want to acknowledge that in some applications, the use of personal devices like mobile phones, can also be a viable alternative; however, our contactless touch interfaces for displays, keypads, and elevators remain very natural, simple, easy-to-use, relatively cheap, and easy to implement. We have a significant opportunity with elevator customers and kiosk clients, providing considerable added value to end-users. Speaking of elevators, one of our key areas is MAD Elevators from Canada. They have developed a new product called PHANTOM, which provides a contactless touch interface for elevator control panels. They have developed, tested, and started rolling out this product and are receiving positive feedback from these initial installations, one example being a healthcare center in Toronto, where they are receiving excellent reviews from both end customers and end-users. We have similar stories from other partners, Dewhurst in the UK and FineTek in Korea, and we are also beginning to approach elevator OEMs and other players in the elevator market across Asia, Europe, and North America. Elevators will remain one of our principal focuses going forward, and I feel that we have made significant headway in this area compared to last year and even from the first quarter of this year. Kiosks, meanwhile, are even more promising for two reasons. First, there are about 20 million elevators globally, but if we tally the number of interactive kiosks of all kinds, it approaches 40 million, a number that is rapidly increasing each year. Therefore, the push for interactive kiosks and the adoption of such solutions is accelerating across Asia, Europe, and North America. We are highly optimistic about our prospects in kiosks. For example, we have partnered with Japan Aerospace to target airports and airlines. Recently, we began a new trial at Narita Airport with SkyTeam, which includes KLM, Air France, and Korean Air, all of whom are expressing strong satisfaction with the kiosks. Narita, being a major international airport in Tokyo, has been pivotal for all Olympic participants to travel through. We've previously announced and initiated more massive rollouts with one major Asian airline and are also conducting installations and trials in South Korea, the Middle East, and we're approaching airports in Europe and North America as well. The transportation sector, especially led by airports and airlines, is crucial but don’t overlook similar installations at train stations, bus stations, and public transport facilities that require check-in, baggage drop kiosks, and ticketing kiosks, where our contactless touch technology is an ideal fit. Another segment we are focusing on is quick-service restaurants and the hospitality industry in general, particularly self-ordering kiosks at hamburger restaurants worldwide. We are collaborating with 50 restaurants in Japan utilizing our Touch Sensor Modules to create contactless touch interfaces for hotel check-ins and other hospitality applications. If you consider a hamburger restaurant, it’s a bit concerning that after touching the kiosk, customers then sit down and eat their food with their bare hands. The displays on these kiosks could benefit from transitioning to contactless interfaces; this brings added value, and we will continue to advocate this with various partners and clients to expand our business in quick-service restaurants and hospitality applications. Retail and checkout terminals also represent significant opportunities for us. I’m pleased to announce that NEC, the Japanese IT company, recognized us with a letter of appreciation last month for our successful collaboration on several projects concerning retail applications, particularly self-checkout terminals for supermarkets and similar retailers. Our partnership with NEC is one of our key engagements, and we are committed to growing our business with them both in Japan and internationally. As a final example of customer activities, I’d like to share a case involving MiTAC. We recently announced that MiTAC selected our Touch Sensor Modules for their smart AI kiosks. This is significant for two reasons: First, the MiTAC kiosks have a 32-inch screen, for which MiTAC has employed four sensor modules per kiosk to achieve the desired performance. Second, this is a smart AI kiosk, which we see as a forward-looking development not only for MiTAC but also for other kiosk manufacturers. At Neonode, we are utilizing our camera-based technology to monitor human activities, both in cars and other environments. We will continue to explore this avenue and work on smart kiosk solutions that meld our contactless touch technology with camera technology. Expect further updates in the future regarding innovations in smart kiosks and technology solutions from Neonode. These are just a few examples, but they illustrate that we continue to execute our strategies focused on elevators and kiosks, each comprising various sub-segments, from transportation and restaurants to retail and beyond. There’s considerable opportunity here for us, both in retrofitting and with new equipment. Neonode is a value-driven company. Our core values are illustrated on this slide: One Team, With Purpose, Customer Focus, and Make Tomorrow Better. Building on Make Tomorrow Better, we relentlessly execute our strategies while striving to enhance the way we operate and everything we do. Over the last month—specifically during the second quarter and into the summer—we’ve heavily focused on our sales, marketing, and engineering operations. We’re working to enhance collaboration between these teams and also to improve their individual efforts. One outcome has been our decision in the second quarter to reorganize our sales team by assigning regional responsibilities. We now have one team dedicated to sales in the APAC region, another focused on the EMEA region, and a third addressing the Americas. We're starting to see positive results from this reorganization, notably an increased sales funnel across all three regions and subsequently higher sales, as reported earlier in this call. We are encouraged by the results from this reorganization and the new talent we have recruited to the Neonode team. This progress motivates me to come to the office every day as we advance together across different teams. I would like to address our go-to-market strategy. We often receive inquiries from shareholders, partners, customers, and interested parties, with one question being frequently repeated: Why have you focused so much on your partner network over the past year? I would like to revisit this illustration and discuss it further, especially regarding our go-to-market strategy. We believe that this pyramid illustration is very fitting for describing both the elevator and kiosk markets. At the top of the pyramid are approximately ten significant multinational companies representing a substantial portion of the market share. For elevators, four companies compose more than 60% of the new elevator market. For kiosks, around five firms dominate global market share. Below them, there’s a significant middle segment represented by medium-sized OEMs that also possess considerable business. At the very bottom, many smaller regional players operate locally. The more we engage with elevators and kiosks, the clearer it has become that this representation suits these markets well. How do we engage these customers? We implement a combination of direct sales through our own resources, especially targeting more significant accounts and strategic clients, maximizing our market penetration pace, and opening doors in markets such as Asia where business is typically conducted differently in countries like Japan and South Korea. We have also augmented our marketing, sales, engineering, and technician resources to install these solutions in the field. That’s why we are collaborating with partners. We aim to direct as many customers as possible to our distributors like Digi-Key and Serial, allowing for automatic management of sales through them, thus saving time and expenses. We find that this hybrid go-to-market strategy, which combines direct and indirect sales through partners, is very effective and fitting for our products, business goals, customer needs, and the markets we are targeting. We plan to continue to invest in this model and are pleased with the results we have secured so far, along with our partnerships established. This approach may not be permanent; we might adapt it over time. The sales cycle usually begins with retrofitting. Here, we benefit from partner collaborations with integrators and tech firms that can integrate and utilize our sensor modules, along with some OEMs working in the aftermarket themselves. Some of these integrators and tech firms have been designated as value-added resellers; thus, they present themselves as product companies or system integrators when addressing their clients. The major advantage is that these integrators include our contactless touch technology in their offerings, thereby introducing us to new customers. Long-term, retrofitting holds the most promise for us, as this process features short sales cycles. We must note that for every elevator or kiosk, at least one individual needs to visit the site and physically install a device in the elevator or kiosk. Installing these solutions in every kiosk and every elevator presents considerable challenges. That’s another compelling reason why we should work with partners to penetrate the market and deploy these technologies. We are starting to notice that as elevator and kiosk manufacturers become aware of our solution and recognize the significant improvements they can offer in user value and satisfaction, they want to incorporate this into their new equipment designs from the outset, marking a transition to the second phase of addressing new installations. It's crucial to understand that while retrofitting remains a primary opportunity, we now increasingly recognize new installs as a viable avenue as well. However, sales cycles are typically longer for new installations. On the other hand, if we have built momentum through previous phases and established good relationships with these OEMs, our offering naturally gains traction. As I noted earlier, NEC represents one key OEM in the kiosk space interested in upfront installations, and they are also retrofitting their own kiosks field. This partnership allows us to advance our position significantly as we work with them to develop and realize new innovative functionalities. Addressing OEMs gives us a powerful channel for nurturing this opportunity and potentially leads to a positive cycle that can manifest over time. Combining this with our previous slides illustrates how advantageous it is to engage partners while simultaneously conducting direct sales and targeting larger OEMs and significant accounts. At Neonode, we are well positioned to work with OEMs and larger systems integrators while appreciating the importance of owning and controlling our technology and intellectual property. We’re developing our capabilities and remain confident in our long-term ability to emerge successfully and profitably from this endeavor. Thank you for your patience and time. I wanted to share these thoughts, as I often receive questions about these topics from diverse parties. With this overview, we are reaching the end of the presentation. I would like to provide some concluding remarks. Firstly, we see a strong and increasing demand for our contactless touch solutions and our Touch Sensor Modules. We can always hope for more and ask ourselves what we can do better. Nonetheless, we are genuinely satisfied with the progress we have achieved during the second quarter, despite the challenges presented by the COVID-19 pandemic and other obstacles. Since the previous year, we have consistently acknowledged that this transitional period requires time and should not be expedited. It resembles more of a medium- to long-term journey. While we believe our progress is promising, we need to ensure the confirmation of our strategies. Our primary focus remains elevators and interactive kiosks, as I outlined in previous slides. The typical application for elevators involves converting control panels with standard buttons or touch displays into contactless touch solutions, effectively making these systems more intuitive and efficient. Additionally, the modification of hall call buttons or displays situated on each floor allows us to sell multiple Touch Sensor Modules for a comprehensive retrofit or installation package. Hence, it's an easily adoptable integration. As Neonode continues to innovate, we will include new features aimed at enhancing user experience and efficiency in our offerings for elevator customers. Interactive kiosks, as previously described, encompass many shapes and forms; they represent terminals and self-service kiosks at airports, restaurants, and many more establishments. Thus, my excitement is rooted in understanding how the global market is increasingly gravitating toward self-service kiosks, and we are here to make them contactless to elevate the user experience and foster safe interactions between people and technology. Overall, we are confident we are well positioned to harness present and prospective opportunities. Encouraged by this, we continue to invest in our workforce, product development, marketing, and sales strategies. Indeed, we are accelerating our business and growth, and this is where we stand after the second quarter of 2021. In the second year of this pandemic, I am pleased to offer this progress update regarding Neonode. This concludes my presentation, and I will now hand it back to Dave.

Thanks, Urban. I now open the call for Q&A from our covering analysts.

[Operator Instructions]. We'll take our first question from Christian Schwab with Craig-Hallum.

Hi, guys. This is Tyler on for Christian. Thanks for letting us ask a couple of questions. First, it seems like everything is progressing well here as expected. I was just wondering if you can maybe give some more color, breaking down what was better than expected or worse than expected over the last 90 days, whether by end market, geography, or even just regarding your pipeline and outlook.

Yes, during the second quarter, we witnessed impressive growth figures for both our licensing business, primarily focused on automotive customers and printer customers. We are quite content, seeing an increase of over 50% in licensing revenues. This trend was also evident during the first quarter. It is excellent news that we are aiming to maintain. We are simultaneously engaged in new licensing or NRE projects aimed at generating additional licenses in the long run. Our solutions business continues to be a focal point that we relentlessly pursue with automotive, military & avionics, and medical clientele. More interestingly, however, is our product business, which has exhibited remarkable growth, achieving several hundred percent increases. We believe we are still only at the beginning of this growth phase for our product sales, which is a central element of building our pipeline. Thus far, Asia is leading the charge, notably Japan and South Korea, though we are delighted to see an influx of promising leads in Europe and North America as well. However, we must remember that many of our OEM customers—often Fortune 500 companies—will not alter their procurement, development, or launch processes quickly. Consequently, it may take some time. The projects currently rolling out in Japan and South Korea were often initiated last year in either Q2 or Q3. Europe and North America are lagging somewhat, but there are interesting prospects beginning to emerge, filling our sales funnels, which we actively qualify.

That’s great. I appreciate the color. Secondly, I understand your near-term focus is on kiosks and elevators, which you outlined very well, so not to distract from that. I want to ask about your in-car cabin monitoring solutions. Is there any updated information? It seems still an interesting long-term opportunity.

Yes! It’s one of the technology areas I personally find very intriguing. Here we are employing cameras and camera inputs combined with AI software to detect humans inside the vehicle, though these solutions could also be utilized for monitoring individuals inside elevators. So, it’s quite versatile. You are correct; our primary focus has been on driver monitoring and in-cabin monitoring for automotive applications. We are advancing the technology platform, developing applications tailored for automotive clients. We have participated in several engaging discussions and are responding to a number of RFQs. However, this process is lengthier compared to our more immediate goals. If we succeed in winning some of these projects, it would mark the beginning of an exciting development phase spanning two to three years before we can expect to recognize royalties from this business. While efforts in this area are lengthy, we are pleased that those areas tie back into our existing applications. This is a strategic move that supports our overall technological portfolio.

And we'll take the next question from Jesper Henrikson with Redeye.

Fredrik mentioned that you had updated your pricing list of some products, which had a positive effect on margins. Could you repeat what that was and elaborate a little on this?

Yes, Urban here. I'll answer on behalf of both me and Fredrik. It’s essential to clarify that our main objective is to drive top-line growth. However, gross margin metrics are also critically important to us, and we continuously monitor them. For example, in the previous quarter, we found our gross margins on product sales unsatisfactory due to one-time effects arising from old AirBar products. In light of this, we'd stated in earlier reports that we are buoyed because our margins have significantly improved. During the end of the previous quarter and the beginning of this quarter, we implemented a revised pricing structure for our distributors and customers concerning sensor modules and Evaluation Kits. This adjustment has led to healthier gross margins—aiming beyond 40%—having eliminated negative effects from earlier sales. This situation is improving consistently, and we're also focusing on reducing costs as manufacturers, which indirectly fosters a superior gross margin.

Great. You also said that you have moved your positions considerably, even compared to Q1. I think that was mainly regarding HMI products. Could you elaborate a little on this?

Yes, indeed! The contactless touch for elevators and kiosks continues to be our primary focus. We’ve also made notable progress across the sales cycle with several promising leads. We've initiated penetration into retrofit solutions and are moving toward targeting new equipment opportunities alongside OEM customers. That feels encouraging. That said, when we shift to Europe and North America, we can see those regions trail a bit behind our established achievements in Asia during the second quarter. Nonetheless, I believe we’re starting to gain ground through the establishment of our regional sales organization, allowing us to efficiently deploy our resources, effectively amplifying our sales funnel and converting prospects into clients.

And do you see a specific trajectory for how retrofit solutions will develop before reaching that stage?

Certainly. I mentioned this pyramid structure. The retrofit opportunity will remain our primary opportunity, primarily due to the vast installed base of at least 20 million elevators plus a comparable number of kiosks. Each year, realistically, we can penetrate only a small fraction—perhaps 5% of that installed base. Nevertheless, should we perform the math, ample opportunities exist. Elevators typically have much longer lifecycles; they last around 25 years on average, often being maintained for even up to 50 years with consistent refurbishment or upgrades. At each of these points, we have a retrofit opportunity as properties seek to modernize systems.

Could you clarify if you see specific partners or OEMs ramping up installations?

Yes, indeed! It's a gradual process, yet several have begun to show momentum. NEC is a specific example that we can transparently share regarding our advancements. Additionally, we are working with several elevator OEMs, including MAD, Dewhurst, and FineTek—key players that have initiated installations and product rollouts. Yet understand that this is a gradual progression and won’t occur overnight. We are in the process of nurturing our business pipeline.

What about Dewhurst? Will their rollout initially be focused solely on the UK market? If so, what would the potential for global expansion look like, and within what time frame?

Dewhurst and MAD are both interesting companies that occupy significant leadership positions in control panels and elevator buttons and both operate internationally. MAD, for instance, is headquartered in Canada; they serve both North American and European markets. Dewhurst has a substantial share in the UK while also distributing their products throughout other parts of Europe. Both companies are engaged in OEM and customer spaces, providing utility to us. We’ve heard from one of the four leading global elevator OEMs indicating that they currently utilize control panels for new projects from both MAD and Dewhurst. Both companies are now implementing and expanding their initiatives. Moreover, in China, we've collaborated with Jardine Schindler and another firm that had just before winter begun to launch their own contactless touch solutions in that region.

And there are no further questions. I'll turn the call back over to you, Mr. Brunton, for any additional or closing remarks.

Thank you. We want to thank you all for joining us for our call today. Have a great day. Bye-bye.

Thank you. And this does conclude today's program. Thank you for your participation. You may disconnect at any time.