Veeco Instruments Inc Q1 FY2021 Earnings Call

Thank you and good afternoon everyone. Joining me on the call today are Bill Miller, Veeco's Chief Executive Officer; and John Kiernan, our Chief Financial Officer. Today's earnings release is available on the Veeco website. Please note that we have prepared a slide presentation to accompany today's webcast. We encourage you to follow along with the slides on veeco.com. This call is being recorded by Veeco Instruments and is copyrighted material. It cannot be recorded or rebroadcast without Veeco's express permission. Your participation implies consent to our recording. To the extent that this call discusses expectations about market conditions, market acceptance, and future sales of the company's products, future disclosures, future earnings expectations, or otherwise make statements about the future, such statements are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made including as a result of the COVID-19 pandemic. These factors are discussed in the business description management's Discussion and Analysis and Risk Factors sections of the company's report on Form 10-K and annual report to shareholders and in our subsequent quarterly reports on Form 10-Q current reports on Form 8-K and press releases. Veeco does not undertake any obligation to update any forward-looking statements including those made on this call to reflect future events or circumstances after the date of such statements. During this call, management may address non-GAAP financial measures. Information regarding such non-GAAP financial measures including reconciliation to GAAP measures of performance is available on our website. With that, I will turn the call over to Bill Miller.

Thank you, Anthony. Good afternoon and I appreciate everyone joining the call. I hope you are all well. Veeco achieved strong first quarter results, reflecting our team's resilience, dedication, and hard work. We are optimistic about returning to more regular operations as vaccination rates increase. However, we are proceeding cautiously, prioritizing the health and safety of our employees. Before we dive in, I want to express my confidence in 2021 by sharing that we will be raising our full-year guidance for revenue and earnings due to our backlog position. John will provide further details shortly. I will start with our Q1 highlights, an overview of our markets, and then hand it over to John for a financial update and guidance. Q1 was marked by solid execution, with results above the midpoint of our guidance. Revenue reached $134 million, propelled by semiconductor and data storage sales. Our gross margin exceeded 41%, and we achieved non-GAAP operating income of $16 million, leading to diluted non-GAAP EPS of $0.25. Additionally, we generated $10 million in cash flow from operations and increased our cash and short-term investments by $8 million. There is strong order momentum across our semiconductor products, aligned with a healthy macro environment in the semiconductor equipment sector, as several analysts are predicting this improvement. For instance, Goldman Sachs has recently revised our 2021 wafer fab equipment forecast upward for the third time, now projecting growth of over 20% in 2021 and another 10% in 2022. A survey among significant semiconductor firms in the US, Korea, and Taiwan highlights their commitment to invest in additional logic, memory, and advanced packaging capacity. Furthermore, the ongoing demand for this capacity is driven by the rapid spread of mobile devices with 5G wireless technology, high-performance computing for graphics, AI, and data center applications, as well as sectors like automotive and cloud storage. These market drivers and the capacity investments from our customers align well with our short-term growth initiatives in laser annealing, 5G RF, and data storage, alongside our long-term growth strategies in the semiconductor and compound semiconductor markets. Besides favorable market conditions, we've made strides this quarter by engaging with customers and delivering evaluation systems, positioning Veeco for sustained growth. Let's now focus on our specific market opportunities. In the semiconductor market, we cater to this sector through three primary product lines: our laser annealing products for advanced logic, ion beam deposition systems for EUV mask blank production, and our lithography products for advanced packaging. Our laser annealing products facilitate high-performance computing and are utilized by leading device manufacturers at advanced logic nodes. A memory customer is also evaluating our laser annealing system for their production processes. Currently, we are the preferred production tool for several leading-edge clients at their advanced nodes, and we recently secured a third application win with one of these customers. We have shipped multiple evaluation systems to both an existing client and a new prominent logic customer as they approach their next nodes. We anticipate securing multiple tool orders as these evaluations conclude over the coming year. In summary, current product demand combined with ongoing evaluations for future nodes makes laser annealing a vital element of our growth strategy for 2021 and beyond. I am pleased to report that construction is progressing well at our new manufacturing facility in San Jose, which supports our semiconductor growth plan. EUV lithography is a crucial enabler for high-performance computing, allowing manufacturers to further miniaturize device geometries. Veeco's ion beam deposition systems are essential for producing mask blanks for EUV lithography, and leading-edge fabs are accelerating their adoption of EUV at advanced nodes, driving mass consumption, which is expected to continue. We are seeing evidence of this trend with ongoing customer engagement, and I am thrilled to announce that we received an order for two Ion Beam Deposition chambers for EUV mask blank production during this quarter. Transitioning to Advanced Packaging, to enhance electronic device performance, our clients have adopted advanced packaging techniques, such as fan-out wafer-level packaging, in addition to scaling down nodes along Moore's law. High-performance computing, including CPUs and graphics processors, is propelling advanced packaging demand. Our lithography products are valued by customers for their flexibility, superior process control, and high productivity. We are observing encouraging signs of rising demand; during the quarter, we secured a multi-tool order from a major OSAT for our lithography products, and we view advanced packaging as a reliable and growing segment for the company. We target the compound semiconductor market via two main product lines: our wet processing equipment for RF filters and power amplifiers, and MOCVD equipment for power RF and photonics applications. Our wet processing equipment provides excellent process performance for RF market clients. The frequency and power requirements of 5G RF are leading to increased content per mobile device. Consequently, we continue to see robust demand as clients expand their filter and power amplifier capabilities. Customer feedback and demo results for our gallium nitride and arsenide phosphide MOCVD platforms have been promising. These products facilitate fast charging and other power management solutions for 5G RF devices and microLEDs. Recent early-stage wins and the shipment of evaluation systems position Veeco well to capitalize on these emerging markets as they develop. Our third key market is data storage, which has experienced growth over several years in alignment with cloud and data center demand. Customers manufacturing thin film magnetic heads require additional capacity to meet rising head demand driven by larger drives. After a period of accelerating capacity additions, including in 2021, our visibility into 2022 is currently limited. However, given the ongoing data proliferation, we are confident in the long-term outlook for our data storage business. Lastly, we are beginning to notice signs of a potential recovery in our scientific and other markets, which are predominantly driven by sales to universities and research institutions. Now, onto our 2021 priorities. First, we aim to maintain resilience across all aspects of our operations. I have witnessed remarkable teamwork and dedication throughout the organization. Our people are what place Veeco in a strong position to meet our short- and long-term growth objectives. Second, we will continue to prioritize profitability, and our Q1 results show a strong start. Third, we aim for near-term growth through our laser annealing, 5G RF, and data storage solutions. Lastly, we are committed to investing in evaluation systems and enhancing our service infrastructure. Our goal is to secure additional application steps that will lead to multi-tool orders, positioning Veeco for long-term growth. With these four priorities, the Veeco team is dedicated to making a substantial impact and building a stronger company.

Thanks Bill and good afternoon everyone. I'll be discussing non-GAAP financial results and encourage you to refer to the reconciliation to GAAP results in our press release or at the end of the earnings presentation. Turning to Slide 8. As Bill highlighted, our revenue for the quarter came in at $134 million, which was at the top end of our guidance range. All markets exhibited year-on-year revenue growth underpinning our full year revenue growth projections which I'll update in a minute. Semiconductor revenue was $52 million, which represented 39% of the total, driven by our laser annealing and lithography products. Compound semiconductor revenue was $25 million and made up 18% of total revenue, driven by wet processing systems sold for RF applications. Data storage revenue was $41 million and made up 31% of our total revenue. And scientific and other revenue was $16 million and made up 12% of total revenue with systems sold for a variety of applications. Looking at our quarterly revenue by region; our Asia Pacific region excluding China made up 41% of total revenue. The United States was 34%. China made up 15%. EMEA was 10%. And finally, Rest of World made up less than 1% of revenue for the quarter. Now turning to our non-GAAP quarterly results. Gross margin came in at 41.5%, which was toward the top end of our guidance. Operating expenses for the quarter were $39.3 million or 29% of revenue. Tax expense for the quarter was approximately $400,000 with net income coming in at $12.6 million and EPS was $0.25 on a diluted share count of 51 million shares. Now moving to the balance sheet and cash flow highlights. We ended the quarter with cash and short-term investments of $328 million, a sequential increase of $8 million. From a working capital perspective, our accounts receivable increased to $87 million. This drove DSOs to 59 days. Accounts payable increased to $43 million with DPOs increasing to 49 days. Inventory increased approximately $10 million to $156 million to support a planned increase in volume in the second half of the year and investments in evaluation systems. Days of inventory came in at 173. Long-term debt on the balance sheet was recorded at $325 million representing the carrying value of $389 million in convertible notes. Our CapEx during the quarter was $2 million and does not yet reflect any significant spending on our San Jose expansion project. Now turning to our guidance. For Q2, revenue is expected to be between $125 million and $145 million with non-GAAP gross margin between 40% and 42%. As a reminder, gross margins are influenced by a number of factors and we do expect quarter-to-quarter variations. We expect Q2 non-GAAP OpEx to be between $38 million and $40 million. GAAP EPS for Q2 is expected to be between a loss of $0.06 and earnings of $0.11 per diluted share. Non-GAAP EPS is expected to be between $0.17 and $0.35 per diluted share. Diluted non-GAAP EPS is based upon a 51 million share count. For reference, we've included a table in the backup section of the earnings presentation to provide detail on the effect of the convertible notes on diluted share count. Now for an update beyond Q2. With growth expected in the second half of the year, we're increasing our view of full year 2021 revenue to a range of between $540 million and $560 million. At the midpoint, this corresponds to 21% revenue growth year-on-year up from our previous guidance of 17%. As a result, we expect non-GAAP EPS for the year to be between $1.10 and $1.30 per diluted share, which is a 40% increase year-on-year up from our previous guidance of 28%. And with that Bill and I will be happy to take your questions.

Hi. This is Wei Mok speaking on behalf of Rick Schafer. Thanks for letting me ask question. So congratulations on the quarter and guide. So with the semiconductor supply chain constrained it seems like there's been an increased sense of urgency if you ramp capacity. There's been a lot of announcements recently on higher spending in the foundry area. So I was wondering if you guys can talk about the landscape. Are you seeing any demand pull-ins any shift in order velocity?

Yes. Thanks for the question, Wei. We are seeing an uptick kind of aligned with the macro trends that you've seen from all the market makers. And we're really seeing pull-ins in our laser annealing opportunities. Historically, we've been a process tool of record with one application with two customers. Last quarter, we announced that we won a second application step with one of those customers. And now we just announced winning a third step. And so that's really quite positive and gives us the confidence to take up our 2021 numbers. But also it's important to note that we recently shipped an evaluation system to a third logic customer. And we have an ongoing evaluation with a DRAM memory customer. So clearly, we're seeing a lot of engagement in the semiconductor space. There's more announcements that EUV is going to be more broadly adopted, which is positive for our EUV mask blank deposition systems. You can see ASML increasing their capacities for scanners out into 2022 and beyond. So we do see that as a solid business for us. Between two to four systems per year. And I guess as ASML continues to increase their output there's about 10 to 15 scanners per one of our systems. So that kind of puts us in the two to four range, but maybe that would tick up a little bit higher. And then finally in advanced packaging, we serve that market with litho and wet processing equipment. We are seeing continued pull-in demand there. This has been a steady business. But we're starting to see some modest growth. We shipped a number of systems to a large OSAT this quarter and we are seeing demand pick up. So generally in the three areas where we participate in the semiconductor space, laser annealing, EUV mask blanks, and advanced packaging lithography, we are seeing those macro trends.

Thank you for the update. For my follow-up, could you summarize how many EUV evaluation tools have been delivered to your customers so far? Additionally, what is the expected time frame from when a tool is placed with a customer to achieving a design win?

Yes. That's a really timely question. We are planning to have 10 evaluation systems in the field throughout 2021. Today, we have six in the field and four are planned to ship the rest of this year. And really here, we are investing to win. We're making large investments in 24x7 service support. So we're really over-supporting these. And of those 10 tools, five are laser annealing; two are MOCVD particularly in 8-inch power and microLED, two in advanced packaging. And one is a core technology, a Veeco core technology in semi we're not really ready to discuss. Most of these evals are lasting one year post-installation. So there may be a few that will be signed off late this year, but I would expect that not to be overly significant. I would think mostly we'll be seeing those in the first half of 2022.

Thank you very much and congrats on a nice quarter and outlook. Bill probably first for you in terms of the strength you're seeing in the advanced packaging market. You mentioned that the large OSAT took orders this quarter. As you look for the next couple of quarters, do you see that demand being a little more broad-based between both chipmakers and OSATs? Or is this still going to be heavily concentrated towards the OSATs?

That's a solid question Patrick. What we are seeing is the customer base the interest expanding to foundries and IDMs as well as OSATs. We do see the opportunity broadening.

Great. That's helpful. And maybe as a follow-up question for John. In terms of just the OpEx management and even capacity management that you guys are undergoing. Obviously, as you become more and more of a bigger semi player, I think, Bill you mentioned 24-7 support. It's a lot different from your other businesses previously. If you could provide a little bit of color in terms of how much more quote, investments you to make on the support side especially on the semiconductor end to keep pace with the demand that's out there.

Sure Patrick. And thanks for the question. So we are upping our OpEx guide here a bit. We did see OpEx for Q1 come in at just over $39 million, or 29% of revenue for quarter one. And we're giving a similar guide for quarter two in that same range. So we do expect to increase OpEx as revenue increases and we support these opportunities, but we expect that as a percentage of revenue that OpEx will continue to come down. And that's our current forecast. And to your point also Patrick, we're also investing in the area of spending in service infrastructure to support the growth in business as well as to support the evals and those investment costs go into our COGS expenses and get included in our gross margin results. So we're investing in there at the same time as well. So, we're currently guiding from a gross margin perspective, gross margins in the same range for Q2 as we experienced in Q1 and expect a little bit of gross margin growth in the second half of the year.

Great. Thank you very much.

Okay. Thank you.

Thank you, Patrick.

Hi, this is [indiscernible] standing in for Brian Lee. I have a quick question about the supply chain. Can you provide an update on your overall exposure to any tightness in the semi supply chain, including raw materials or subcomponents, and explain your mitigation process?

Yes. I would say at the beginning of the pandemic, we did have to resource a few hundred fabricated metal components out of Asia back to the US for continuity of supply chain. But that was completed a couple or three quarters ago. I would say right now our supply chain is holding up pretty well. And it's not really a constraint right now. We are obviously on top of it very aggressively, but we are able to manage through the supply chain issues.

Okay. Great. Thanks. And with respect to, if you do have to qualify new suppliers or build out inventory what does that timeline look like?

For the specific machine parts I was speaking of, those are built to print parts. And so the process is really a first article process. It doesn't take a long time to change. For a larger controlled OEM component that would be a longer process of becoming qualified with a customer. It was a particularly critical semi application. But we have not experienced that yet.

Good evening, everyone. Thank you for addressing my questions and congratulations on impressive results. My question focuses on the data storage business. You had previously indicated some strength in the middle of the year, but it seems much of that came through in March. Given the lead-time of about nine months, could you explain what changed? Why did March perform better than expected? Additionally, in your prepared remarks, you mentioned visibility, but could you elaborate on the outlook for the rest of the year following that strong performance in March?

I will address that, Tom. Perhaps John can provide additional insights. In terms of the March revenue, that figure aligned with our expectations. We shipped what we anticipated in Q1, expecting an increase based on our backlog compared to Q4. Since some of the average selling prices of these systems exceed $5 million, even minor shifts in shipments can affect the quarterly trend. Overall, Q1 met our expectations. Bill, would you like to elaborate on the market in more detail?

When we provided our guidance for 2021, it was based on our strong backlog, and that has not changed. Therefore, we anticipate a strong data storage year in 2021.

Great. That's helpful. A two-part question here. One, can you describe what kind of lead revenue you got in the March quarter? Do you have any plan for the June quarter? And could you walk through what your expectations are for the four different segments headed into June just to get us to that midpoint of guidance? Thanks a lot guys.

Sure. Let me break it down by market. We have observed a relatively flat quarter at the midpoint of our guidance from Q2 compared to Q1. We see an increase in data storage, aligning with our expectations in the Q2 guidance, while other markets are either flat or declining. Specifically, regarding your question about our compound semiconductor sector, which includes data storage, we do not anticipate significant LED sales in our Q2 figures for compound semiconductors.

Yes. Thanks for taking the questions. Just real quick on the data storage side. Can you talk about the number of passes or the intensity of your Ion Beam Etch and Depth tools when you go from perpendicular according to advance to HAMR. Each generation, how much more equipment does your customers need?

We've observed that our customers are experiencing a 35% annual growth in data storage. This growth is driven by two main factors. First, the size of the drives is significantly increasing, and there is a rising demand for the production of heads. The industry anticipates an 8% to 10% growth in heads as a result. Additionally, as the transition occurs from traditional recording methods to energy-assisted magnetic recording, the complexity of the heads will also increase significantly, which is expected to grow at a similar rate of 8% to 10% per year. Consequently, the number of passes that each head must make is projected to increase by about 8% to 10%, thus supporting the overall market growth.

So what you're saying is that we can expect 16% to 20% growth going forward for the intensity, assuming the number of heads per drive remains constant and the drives stay relatively flat, with just more data being stored on each drive. Is that the right way to understand it?

Yes, that's correct. I would just add that the customers' purchasing patterns for capital equipment do not follow an annual growth rate of 8% to 10% or 16% to 20%. There may be some fluctuations, but generally speaking, over a longer period, say many years, the growth does tend to align with that 16% to 20% range.

Yes, got it. Got it. That makes complete sense. Obviously, it's cyclical. And then on the compound semi side, there's a lot of emerging markets there. Micromini-LED, displays, LIDAR, health monitors, GaN Power, GaN RF. Could you just walk through which ones of those applications sort of the opportunity first? And which ones do you see coming later on?

Yes. So in compound semi, we have two product lines. One is wet processing, where we are seeing significant demand from customers for RF filters and RF power amplifiers, really driven by 5G adoption in handsets. So that's clearly happening now. And in the MOCVD space, our business is at low levels, after exiting the commodity LED business. We've obviously restructured that business and the like. And we go-to-market with two products. One is gallium nitride. We have a single-wafer reactor. And that is really tuned for the power electronics, RF, and innovative silicon-based microLED applications. What we're seeing now is growth in GaN power applications, particularly at 8 inches. So customers are moving from 6 inches to 8-inch format. And those customers that are doing that are choosing Veeco. So that's a driver of growth this year into next year. And then if I were to think about longer-term opportunities like microLED that you mentioned, I would say that is still farther out on the horizon, like in the two plus three, three-plus years out but could be a nice opportunity for us.

Okay. And what is the interest in arsenide phosphide 3-5?

I think. Yes. So we go-to-market with Illumina batch tools. And that's tuned for applications in Photonics, such as indium phosphide lasers, VCSELs, as well as red micro LED. We just recently shipped an evaluation system for microLED with this product. But it's still further out, but that's certainly an opportunity for the company.

Got it. Could you just list how many of each type of evaluation tool are currently available?

Sure. So we have a total of 10 that we're planning, six are already in the field under evaluation or various stages of installation; four are planned to ship the rest of this year. And so of those 10, half of those are laser annealing for logic and memory. The third logic customer, the other two customers, but their next most advanced nodes and as well as DRAM memory applications. We also have two evaluation systems. One, as I mentioned in power, 8-inch power we're planning as well as microLED. So that's 7. We have two in advanced packaging. That's a subset of semi. And one is a core Veeco technology that we're developing for the semi market and planning to ship later this year.

Got it, got it. Yeah, no it’s real helpful. And then spares and service in the quarter and I'll leave you guys along.

Okay. Spares and service in the quarter give me a second here.

I believe it was $38 million.

$38 million.

Thanks Gus.

Congrats on the quarter. The disk drive industry is just starting to transition to HAMR and EMR heads. And I'm just wondering, you supplied both deposition and etch tools for thin film heads. How does the transition to the HAMR and EMR type heads? Does that require more of your tools, less of your tools? I'm just wondering as we transition over the next couple of years, what that means for Veeco in terms of their data storage equipment?

Yeah, Mark, that's a very timely question. I would say that it's a positive, overall very positive for Veeco that technology transition to HAMR or MAMR because as the heads become more complex, it requires more passes through Veeco's equipment and that's about 8% to 10% due to the technology transition. That's what we're figuring it to be right now. And it's overall positive.

More an opportunity for etch or for depth?

It's probably more depth, but I'd have to probably go back and check that, but it obviously more towards that.

In terms of projecting your growth opportunities over the next 12 to 18 months, regarding the mix of tools you'll be selling, are you expecting a higher mix or something similar? You indicated that you anticipate somewhat higher margins in the second half of the year. Are you seeing an increase in mix, or do you expect it to improve as the year progresses into 2022? Or will it stay roughly the same?

Our expectations for growth in the second half of the year, as Bill mentioned earlier, are primarily driven by the semiconductor side, especially in laser annealing. We are also observing an increase in advanced packaging. Additionally, we anticipate higher revenue from data storage in the second half of the year, which we expect to see grow in Q2 as well.

How would you rank in terms of your tool margins? It used to be advanced packaging and litho tools were the highest followed by ion beam tools and then laser anneal, is that correct? Or are they all similar in terms of margin contribution?

I would say that without going into too much detail about the products, we could easily get sidetracked. Looking at the market components, the gross margins are within a couple of percentage points above and below the company average.

Yes. I'm sorry for the additional question. Taxes for next year, I think we were told you're running around $2 million for this year. What will taxes look like for next year? How much will they increase?

Yes. I don't think we've given that outlook for next year. And for taxes, I would say we still have the NOLs. So from a cash perspective, we, at this point, don't see a substantive change to our cash taxes, as we still are shielded with NOLs.

Yes, I'm sorry, my phone dropped off for a couple of moments there. So I apologize, if I'm asking a question you already answered. But you mentioned that you had a strong backlog entering the second quarter. Could you help us understand what the size of the backlog is, or give us a reference point how much it grew? Or any sort of color there so we can understand why you're so confident about your backlog?

Sure, thanks, Dave. We reported a backlog at the end of last year. We've moved away from providing quarterly updates on bookings and backlog. I can say that the trend has been positive. As Bill mentioned, we started the year strong in data storage within our backlog. We are actively working through that backlog, and the main contributor has been data storage, followed by semiconductors. This trend remains consistent.

And could you just remind us what the backlog was, I guess, you're not going to tell us what it was?

Sure. We entered the year with a backlog of $366 million, which was a $100 million increase from the end of 2019.

And I'm just assuming, based on your commentary that the backlog was up sequentially in Q1.

You can read into that.

Okay. Thanks. And just, as far as the LSA business goes, thank you for the update on all the advanced nodes. I think, a big chunk of that business is the trailing edge nodes. Could you talk about what you're seeing in trailing edge nodes throughout Asia, because that's mostly where that business is? In fact most of the business is in China, I think.

Is this a laser-annealing question?

Yes.

Yes, I would say 75% to 80% of the business right now is actually at the leading edge logic customers. And I would say, 20% or plus or minus, is in the trailing edge node. And that it's staying at about that ratio. I don't know if you can add any more color to that John?

No, I think that's right, Bill. I think that's what we've seen over the last trailing quarters, number of trailing quarters. And we don't currently see a change in that trend.

I would say that the growth that we've seen is really by the leading edge nodes, winning application steps at the leading edge nodes.

Okay. And as far as, just a related topic somewhat is, are you having any restrictions on shipping product to China? A lot of people have been waiting for licenses and have a backlog of unshipped tools. What are you seeing in this area?

Sure. So, we're subject to those same export compliance rules. What I would say, Dave, is that, we've seen our revenue as a percentage of business coming from China has stabilized, exiting the LED business at the end of 2018. We were in a period of time where we saw our business in China as an overall percentage declining. And now, it's about 15% or so of total revenue. And that for us is pretty broad in terms of both the products that we're selling into China and the customer base. And some of that requires export licenses, some doesn't. Some customer base requires export license, and others don't. So, for us, we see this business in this current range. And to the extent that export licenses are required and we don't have those export licenses, we don't include that in our backlog or put that in our guidance expectations.

Could you elaborate on whether you've faced any difficulties in making shipments to China due to export restrictions? If so, I'm interested in understanding the volume that has been held back, as this could eventually impact our performance positively.

Right. So, as an example, if you're specifically talking about a customer like SMIC as an example, we've not obtained any export licenses to ship to a company like SMIC, if that's what you're referring to. And if we were able to get export licenses to a company like SMIC, we could see an increase in the business in China.

It's probably also worth noting that, since those kind of requirements came from the government, we have not booked POs subsequent to that into our backlog. So, there's not a risk of much backlog of operation either.

Okay.

Thank you, Dave.

And there are no further questions in the queue at this time. I'd now like to turn the conference back to the presenters for any additional or closing remarks.

Thank you, operator, and thanks for joining our call today. We are excited about 2021 and I want to thank our customers, shareholders along with the entire Veeco team for their continued support, as we execute our growth strategy. I do look forward to updating everyone at upcoming conferences. Have a great evening.

And again, that does conclude the call. We'd like to thank everyone for your participation. You may now disconnect.