Good day ladies and gentlemen and welcome to AXT First Quarter 2017 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would like to turn the conference over to Gary Fischer, Chief Financial Officer. Sir, you may begin.

Thank you Takia and good afternoon everyone. Before we begin, I would like to remind you that during the course of this conference call, including comments made in response to your questions, we will provide projections or make other forward-looking statements regarding, among other things, the future financial performance of the Company and our ability to control costs and improve efficiency, increase orders in succeeding quarters, improve our competitive position as the market improves, our ability to meet market demands for our products as well as other market conditions and trends including expected growth in the markets we serve. We wish to caution you that such statements deal with future events, are based upon management's current expectations and are subject to risks and uncertainties that could cause actual events or results to differ materially. These uncertainties and risks include, but are not limited to, overall conditions in the markets in which the Company competes, global financial conditions and uncertainties, market acceptance and demand for the Company's products and the impact of delays by our customers on the timing of sales of products. In addition it may be discussed in this call, we refer you to the Company's periodic reports filed with the Securities and Exchange Commission and available online by link from our website for additional information on risk factors that could cause actual results to differ materially from our current expectations. This conference call will be available on our website at axt.com through April 26, 2018. Also, before we begin, I want to note that shortly following the close of market today, we issued a press release reporting financial results for the first quarter of 2017. This information is available on the Investor Relations portion of our website which is at axt.com. Now, turning to a review of our…

Thank you, Gary. And good afternoon everybody. This has been a very busy quarter for us. We are seeing encouraging progress in the adoption of several emerging technologies and we are continuing to invest in our product development, production capacity and customer engagement and support capability in order to position ourselves for coming business opportunities. We are also very actively preparing for the relocation of our gallium arsenide substrates business, which will occur in stages and is expected to take place in approximately next two years. In addition, we recently completed a successful secondary offering, helping to ensure that AXT is well capitalized for both business expansion and coming relocation. And finally, as Gary mentioned, we experienced and then quickly and effectively dealt with a short-circuit fire at our Beijing facility. Throughout a busy and productive quarter, I’m most proud of the way our team has pulled together with a shear sense of purpose to support all our key stakeholders, including our customers, investors and fellow employees. 2017 will likely be a very important year for AXT, and I believe we are taking the correct steps to ready our business for our next phase of growth. Now beginning with indium phosphide business. Q1 was another quarter of sales, though down a bit form Q4 despite of some recent mixed signals in the news, we have been encouraged by indication that our customers that suggest improved conditions in key regions. EPON and GPON market particularly in China, has historically been the key driver indium phosphide demand in application such as fiber to the home and office. We believe that in the last four quarters, there was a slowdown in purchasing from carriers as well as inventory buildup in supply chain that constraint market growth and we have taking an appropriate measure…

Thank you Morris. Okay Q2 is shaping up nicely. We expect revenue growth in Q2 of about 9% quarter-to-quarter. As such we believe that total revenues will be in the range of $22.0 million to $23.0 million. In terms of our bottom line outlook for Q2 we are expecting to be in the range of $0.04 to $0.06 profit per share, based on $37.624 million diluted common shares outstanding. Factored into this range is our belief that the seven partially owned companies that are accounted for using the equity method will represent a charge in Q2 of approximately $280,000. This is a strong improvement from the $933,000 charge in Q1 and even the $588,000 in Q4 of 2016. Okay this concludes our prepared comments, Morris and I will be glad to answer your questions now. Operator?

Thank you, [Operator Instructions] Our first question comes from Edwin Mok with Needham and Company, your line is open.

Hey guys, thanks for taking my question, congrats for great quarter and guidance. So first I want to kind of focus on indium phosphide, Morris you mentioned that you expect based on your backlog on order trend you expect a record quarter in the June quarter, but we always have certain more data point about the Chinese market being struggling more. Is it just growth form same photonics that is offered in that or you mentioned something smaller customer buying as well, can you give us maybe a little more color on that.

Sure, I think you know it’s our understanding of the market is not total because a lot of customers just buy substrate from us, they don't really tell us what exactly they are using it for. but for the China PONs market we are seeing a renewed growth well quite a bit of recovery from second half of 2016 level. So actually the other pattern is pretty strong in April and May. But we are still anxiously waiting for the June order. So we do want to see a sustain pattern, but we do recognize from the order, they are for the China PONs market. And of course silicon photonics, we believe it’s in growth mode and they have grown quite substantially from similar periods like compared to last year. But the other thing that maybe I can comment is that you know the second half of 2016 the PONs market really took a beating, because of over inventory or clouding in the inventory. But our revenue nevertheless, didn’t really take too much of the slowdown. Although, we grew less robust when compared to prior year, but nevertheless it was a growth here and I can definitely say that can be accounted for wider growth of the silicon photonics market, which we don’t believe is slowing down, we think it still has more lives to go.

All right. Great. I know like you said, customer doesn’t necessarily what they use this substrate for so it maybe hardly for you to describe that. But if you could just kind of maybe describe how your market exposure has been, I think historically like two years ago it was $1 million [indiscernible] has been the China PON market. Do you think that has changed now, do you think silicon photonics accounts for [indiscernible] business and you can describe like that?

Gary?

Yes. We have been sort of given the estimate, because we do the sensitive internally. We do think silicon photonics has grown and it could be as much as 25% of our indium phosphide now. And we still think the EPON, GPON is the biggest part and then we have the category that I would call everything else, which is maybe another 25% to 30%.

Gary, a good comparison is, I think that 20%, 25% guesstimate on silicon photonics compared to let’s say two years ago, it was almost [indiscernible].

Yes. Compared to two years ago silicon photonics. It’s going in the direction that is the investment community and analytical community has thought it would and is the one that Morris Young said will be going that direction too. So it’s fulfilling our expectation and we think it’s going to be strong. So we are aware that there is a lot of noise out there especially this morning today about what is going on in optics in China markets and stuff, but I guess we are seeing a little bit more positively on micro level for AXT as oppose to the micro level that you guys are all seeing in the marketplace.

Yes, one explanation maybe I can offer is that the PONs markets compared to last year was really very dramatic. Okay. And that was a result of maybe inventory correction or so all the demand almost just died and now although China market is maybe not as robust. But nonetheless whatever you do you need the time. So…

Okay. Great.

That’s another explanation why we are seeing the market still fairly healthy for us.

Great. That was very helpful color. So I will leave that question, and I’m sure all the other guys will ask similar question but on the 3-D sensing you guys have any kind a incremental color in terms of what is going on in near term demand. I think you guys have previously talked about that you have gone through a qualification process of acquiring your key customers. Any update on that front, to-date have you gotten any color in terms of when either a discussion will be made or that if the market does [indiscernible] anything on mobile that do you expect to see in orders coming on soon. And so just any kind a color there.

Sure Edwin. Unfortunately up to this point we don’t have a order, we deliver almost over 1000 wafer for qualification and with key customers. We are still anxiously waiting, there was really no bad news of saying our product is not worth, but of course we are still anxiously waiting for the order. But I think we are still doing all the preparation work, we are actively developing our product development to be able to yield very high yield for this very demanding low EPD requirement for these applications. We are actively engaging with potential customers and also we are preparing ourselves for active sales engagements form hiring more people to strengthen our preparation for this market to kick off. And also given that the application is so wide spread all the way from artificial intelligence to automobile to cellphone market and everything else, I think perhaps, everybody is really very focused on this one single customer, but we believe that shortage could be a big driver for the great demand for this material. But I believe that if this big so business is going to solve a lot of problems for renewed applications for only cellphones but also driver less cars and artificial intelligence. We think our preparation is not going to rolling back.

Okay great. that's helpful color. Last question, I'll ask some more question and I'll pass it on to other guys. Just on the new production site, can you provide us a little more color where you are right now, have you identified a site, have you seen near-term timing or do you have any rough idea of when you are going to actually start building up the site and then that's all I have. Thank you.

You know the fire affected us, the detouring production was only for four days, but we are still busy doing some amendment and still because there are furnaces which was affected, so we are building more capacity for that. But nevertheless because of the inventory we build up by ingots we don't think it's going to affect our revenue possibility in Q2. And we are also very actively doing the site selection. And so that we will make a final decision on the new location pretty soon. We believe it's going to be within weeks into the month now. And once we made that decision on the new location, we will provide again chart, we will provide a strategy both to our investors as well as our customers who are anxiously waiting to see that. We do believe that we have better ideas how to well those remove some of the concern our customers and also provide opportunities especially somebody is going to look for a great growth potential both in indium phosphide and the low EPD VCSEL supply chain that would provide a good solution to this market.

Yes Morris and I are going to Beijing next week and the week after, we will be there for two weeks. One of the top two or three things that we are going to work is concluding the site selection and just to add a little bit of color as a reminder that you know we are looking at what we think is going to be about a two year program. It's a staged relocation, we will be never be down until that [indiscernible] production in Beijing at the new site and then slowly phase it out from Beijing for gallium arsenide. So we have the plan and we have a couple of sites that we are very closed on.

Great, that's all I have. Thank you.

Thank you, our next question comes from Richard Shannon with Craig Hallum, your line is open.

Hi Morris and Gary, congratulations on a great finish to the quarter and thank you for taking my questions. Maybe first couple of questions on indium phosphide, this is just an effort to try and do some modeling here on this parts of the substrate business, wondering if you can give us a sense of what kind of growth year-on-year growth you are expecting for indium phosphide in the second quarter. You talk about it being a record quarter. What kind of growth rate does that look like and what was the previous record quarter, when did that occur?

I think the last record quarter was probably the second or first quarter of last.

It was in 2016 for sure, I don't remember which one. We are not really giving a prediction for growth in 2017 we are not sure for one thing at this stage of the year, but given the strengthening PON market that Morris just spoke about for the equipment market and the commercialization of silicon photonics for the data center connectivity, we believe its growth rate could exceed that from 2016 and 2017.

So let me give you a little more optimistic view I think, in 2016 around the second half, our indium phosphide revenue was really been negatively affected by the PONs market because of the adjustment in our inventory et cetera, and then silicon photonics is really the savior and we still have grown in the mid-teens with that indium phosphide for 2016. But now for 2017, I think we are starting to see the renewed demand for PONs market, I mean again I want to reiterate we are seeing the demand from China, but of course less conflicting is what street is saying the China market is still slow or it’s going to slow down. But I think you know the offered explanation could very well be that the kind of a slow market in the second half of 2016 was a over correction, so we are not coming back, okay. But you add on top of it silicon photonics really are not slowing down at all, so if it provides other growth year for 2017 compared with 2016 then definitely 2017 would have been a better growth year than 2016. Okay, So it’s better than mid-teens level.

Okay, alright, fair enough, another question on the indium phosphide topic around silicon photonics. I think, if I got your commentary right, you think that that’s roughly a quarter of your indium phosphide business. Is that what I heard?

Yes. That’s correct.

Okay. How many customers are in there?

That we are not so sure about and we made our estimate based on one that we do know about.

Okay.

Yes. That is correct. And…

I think we can all guess some, who the one is, I was just wondering if there any more that you are aware of, but I think that. Okay. I think your message is clear there. So that’s helpful.

Yes, we have not acknowledged of the others, so.

Okay. Question on the JVs. I think you are talking about charges for this quarter being a lot lower than previously. Can you help us understand why there is higher revenues or better margins or what is the driver for the lower charge for JVs?

Yes. Well, first of all, I want to underline what I said in my prepared remarks that the large number in Q1 had a $313,000 impairment charge, which means we have a company that’s struggling and we took a conservative position and rolled our asset investment down to zero. But even so without that we would have been roughly around $600,000 close to what it was in Q4. What is happening is this, number one the germanium material pricing has gone up. And so that’s going to help our germanium company, which was one of the companies that was dragging us down quite a bit in 2016 kind of leader in the pack of bad numbers. So that’s helping us and we do have kind of the hedging strategy for our listening audience as you know. So we are glad that our germanium company that partial ownership, that we own 25% of the mining company for germanium in China. We glad to doing better, but that also will eventually seat back in to higher germanium raw material costs for our germanium substrates, so it’s a little bit of yin and yang here on those things. So germanium is a one thing and then our refined gallium companies have seen a slight improvement in their P&L and the rest is sort of noise level stuff, but I would say it’s both two things the germanium company and then the refined gallium companies are improving. I think we would have probably said to a number of you that our goal for 2017 is we would like to see that line down there will be only operating numbers being neutralized. We are also sure it will become a huge positive by year-end, but what we would like to see it get to a complete building kind of plan and I think Q2, which we have a go set now is giving us positive sense that this is achievable, but we have long ways to go.

Okay. Great. My last question for you, probably for you Gary, you talk about gross margin goal of hitting 35%. Wondering if you can give us any sense of what kind of a profile of business you expect to have mix wise, substrates versus raw materials and also with kind of revenue scale needed to hit that?

Well, just a couple of data points. If you look at the 2016 numbers you know that’s where we broke it out in the 10-K and raw materials were 19% of revenue. Coincidently that’s almost exactly what the percentage was for Q1 that we just finished up. So I think rule of thumb in the coming quarters raw material is going to be high-teens, 19% 20% something like that. Substrates will be to the rest, but probably overtime and I'm not saying if the obvious quarter-to-quarter the raw materials will fall a bit lower because we think the substrate businesses will grow faster. And that growth is going to be primarily driven by phosphate. So to get to 35%, we think the easiest way to accomplish that is to grow indium phosphide business. indium phosphide is a very difficult product to make and we happen to be very good at it and we have decent yields. And so it's profitable product line for us. So as a business person if I have o have a $1 million of sort of free revenue I'll always say I wanted to be and indium phosphide at AXT, because that's the best product. So if we can grow indium phosphide then that's the path to get to where we are talking about, so.

Okay, and fair enough I appreciate that details, that's all the questions from me guys. Thank you.

Next question please.

Thank you. Our next question is from Tom Sepenzis with Northland Securities. Your line is open.

Hey guys thanks for taking my questions and congratulations on the rapid recovery. I was wondering if you get silicon germanium you did mentioned the couple of the markets that you may have said are either recovering or expecting growth out of that business or is that just something that you believe will going forward?

Yes, silicon photonics should continue to be growth pocket. I mean while we were talking about maybe recovering market is the PONs market.

No sorry, Silicon germanium.

Germanium okay, germanium market I think it's sort of - last quarter was down slightly. But I think because of the satellite applications they are growing strong. We expect that to grow from Q2 again. So Germanium is a very strong market.

A lot of the Germanium goes in satellites and the satellite business is diverse, it's part of what was in Morris’ prepared comments. And so we are seeing a lot of good stuff, Tom it's still our third in terms of product revenues it's [indiscernible] as much as behind indium phosphide and gallium arsenide. But it's growing recently and it's a stable product and it's contributing.

The good thing about germanium is you know everything goes into a satellite needs many key tie ins for qualification and good quality. So that business is a very defendable business not everybody can do it, [indiscernible] what we do.

Great, thank you. And then Gary you mentioned the charge for the JVs is going to be 280 in the June quarter, is that a good number to use moving forward. How should we be thinking about that on a longer term basis?

I don't know, I think we should answer on the quarter. We will try to get some sense, we normally don't give guidance at that detailed level, but because the numbers are jumping around so much it's kind a certainly not to assess it a little bit and just be straight out about it. So are going a little bit more on our trip. We always get a little more knowledge when our feet are on the ground, Dr. Morris Young [indiscernible] in China. So Morris is on the Board of all ten of these companies and so we try and meet with them and it’s pretty useful. So sorry Tom I don't have a good answer for Q3, Q4 or next year, but you know what we hope and what we think is credible and reasonable is that it will continue to trend - he negative will continue to melt down to a smaller and smaller amount.

Great, thanks very much.

You are welcome.

Thank you, our next question is from Joe Maxa with Dougherty and Company, your line is open.

Thank you, regarding indium phosphide, and what you are hearing from your customers, I'm wondering what you are thinking about the second half of the year, you talk about silicon photonic continue to be a growth engine and PONs market stabling so are we assuming you should see incremental growth each quarter as the year progresses and into next year.

You know as we stated in our prepared commentary, I mean from our sales department we do see pretty strong order patterns that we know are specifically designated for China PONs market. But that's compared to what we experienced last year. Silicon photonics, we do see that demand is strong and we do believe that's probably more predictable and it’s going to continue. But whether it’s going to have a second kicker or not in the fourth quarter or not we don’t know, and the other phenomenon we also saw was there is a lot of this small pockets of orders from let's say the third tier customers. They usually buy hundreds of wafers at a time and they are fairly active. So that so the leads to believe two things. I mean a lot of people are thinking this market is robust, you know usually a 100 wafer order will lead to 200, 300 and eventually lead to thousands of wafers orders, okay. So we are encouraged by that accumulation of little orders and so we do have a good reputation out there and then people when they want indium phosphide they come to us. So I think you know hopefully all those little orders will start to grow and into bigger markets.

Okay, that's helpful, and talking about the noise out there today, can you give us any indication of what your exposure is to wall way over in China.

No. Joe we usually really don't want to comment on customers, specific customers especially and I can only see these I think you know when the substrate demand comes to us, I mean this is the long way because you know you never know what customer want to do build inventory and as I said, I suspect some of the renewed ordering patterns for our PONs market that we believe goes to the PONs really come from the fact that last year they were down so much, so they try to come back somehow. So you know we are anxious to see whether it's going to continue for the next month to the next month, so after one more quarter maybe we can all conclude whether the PONs market really is coming back strongly or are they just recovering. I mean so far we have seen almost like 70% what they used to do, but last year we went after almost like 20%, 25%.

On the indium phosphide side are you seeing, I mean I am assuming you have plenty of capacity to meet your demand, but are you coming up to a point where you need to start adding capacity.

This is again I would say this good point of actually, we have always been telling to our customers. Because we know mid-year from China, [indiscernible]. We probably expand as we see market. And unfortunately last year, we prepared a lot of potential growth for us we didn’t grow as much. But growth it’s really a easy thing for us.

Yes. As I said another discussions, there are certain tracks on adding capacity one is the footprint, the facility and that track is a longer track. And then the second is manufacturing equipment, chief of which is the furnaces, but also maybe more wafer size some grinders to grind the wafers something like that. But the cycle for this is about 90 days. So the detail we can give is that we have the footprint for indium phosphide that we can add more equipment. And so when we cross that line, we will just pull the trigger and 90 days later we will have more and more capacity. So we think, we are in control of our future let’s put it that way.

And then lastly, you think the JV impact to neutral by year-end. What does that entails, I mean I’m assuming there is not another impairment charge coming to get it there. But is it more that you need prices to keep going higher and what you think needs to happen?

Yes. Well, you know the [indiscernible] recovered quite a bit in the fourth quarter. Unfortunately during Q1 it took out a bit. Although, it didn’t reach all time low, but I think that’s probably normal, because as soon as the price recovers other everybody wants restart their production and then so you see the price pressure on the material again. But I think eventually the stronger world to survive and I think the other good thing about it is our JVs are we raise in either number one or two. So I think there will be survivors. And second of all, I do believe that application for gallium will continue to roll. You just look at the 3-D sensing thing, it really become wide spread an option of 3-D sensing to everything including in automobiles. So the best way to describe it is, is if you want to give intelligence or vision to a machine you got to have lasers and the best way to provide lasers is bit cells and the you need gallium arsenide. So that will really improve not only our [indiscernible] to serve the market also you are going to create more demand for gallium. And not to mentioned the solar sales application and magnets using gallium. None of these end-market actually declined. So I firmly believe, it’s a matter of time when the gallium market will recover, but as far as how far when we recover, I believe 2016, you are looking at gallium price selling as slow $100, $110 at year end, I don’t think it will ever go back there again. So I think I’m optimistic that we should see - although it may not be a straight line, but gradually it should improve somehow.

Yes. So I mean, Morris’ comments in terms of the gallium we embrace that’s probably not going to move the needle in 2017, because the 3-D thing is really an 2018 growth phenomenon, but to your part the answer is more help on the germanium side. That remaining company was one of the top leaders in the downward numbers. And so we only have one germanium company which is fine. For example we have several gallium companies, we have two arsenic companies, we have a resin company that is used for gallium extraction from aluminum. But for germanium company we didn't have as much influence as some of our other companies. It's a state owned business, so even though, I think Morris and I are both I think on the board of that one. But let's just say it's easier to influence some of the other companies whereas this one like you talked - one of our other companies we had a reduction in force last year. But because this is a state owned company and then kind of keep employee employed it's in discussion, we can't even bring up the topic of having a reduction in force. So what we need for the germanium price could go up a little bit more and maybe for them to get a little more efficient in their yields that's in addition to what Morris said about gallium, I think that's the other thing that I’m watching. And it's trending okay and I'm cautious, but I feel like the needle is beginning to swing back in the right direction.

Okay. That’s all I had, Thank you.

Thanks Joe. Next question?

Thank you. Our next question comes from Hamed Khorsand with BWS Financial. Your line is open.

Hi, couple of questions. One is, how much visibility do you have from your customers in the orders that you are seeing right now?

So what do you mean how much that visibility mean?

Lead times that you have and how confident you are with the guidance you are giving. I mean usually I expecting you guys will have some sort of lead times. I'm trying to understand how much visibility you have in the quarter you are only about one month into it.

Yes. Usually we see, we do have that much of a good visibility. But looking at a strong quarter since Q2, some of lines are very busy. So I think the confidence level is pretty high.

Yes and there is visibility that you get from a hard PO and that there is another kind of visibility which is that we have been continuingly getting orders and we get feedback and guidance verbally. And because it's hard to change suppliers, once we are in our share of that business probably won’t go down and hopefully we can take it up or we might be a soul supplier. So to be blunt, we don’t have the backlog fully booked for Q2, but our confidence level is probably as high as it's been in five or six quarters, seven quarters and it's strong, yes so.

Okay and my other question was as far as efficiency goes in production, are you back to normal for Q2 or not yet?

Well, it's still slightly affected. I think some of the places that we used to have are more compact. Now we have to travel a little bit longer distance in order to make the production line connected. But I do hope that as time goes we should be able to mitigate that. And also what the influence our gross margin I guess everybody worry about gross margin and profitability. I think the product may definitely will play a big role.

It's a bigger role than the inefficiencies from the fire. So you know in a sense we will never be back to normal because we actually pulled stuff out of the building that had the fire and we moved it to the building next door. So there is a new norm that we are putting together. But what I would say is that what we are doing is mostly going to invisible to the shareholder community and the investment community. So we are working on it, we can't tell you everything is fine there's no more work to do. We still think about it. It's going to be one of the hot topics when we get over there next week, you know kind of where do we stand, what are the next steps. But you know we are very encouraged with how our team has responded and you know fortunately and by sheer coincidence Morris and I were both there as scheduled before this fire happened. But it enabled Morris especially to step in and show very strong leadership and you know our team stepped up, so the short answer is it's not ever going to be normal in the old way, and we are still working on stuff, but certainly you won't be able to tell it’s going to be invisible to you , yes.

Okay great. Thank you.

Thank you, we have a follow up from Richard Shannon from Craig Hallum, your line is open.

Hey guys just one question from me. Morris you have been talking with your direct customers on the topic of 3-D sensing for a while, I'm sure you are trying to develop the answer and it changes over time, but I'm curious, what kind of size of a market for gallium arsenide substrates do you see for 3-D sensing relative either as a quantifiable number or relative to your current gallium arsenide markets [indiscernible].

That's really very hard question to answer Richard. I tell you because the reason is that depending upon what size that I believe is going to come, I mean I have seen some predictions last year that number was pretty high, and assuming the ASP and we are talking about quite a substantial uptick for the total adjustment market for gallium arsenide substrates. But recently you know you see numbers are - I would characterize to say - well first of all we do have order we are frustrated, but also even if the order were to come I think the prediction is that it’s going to be much smaller. So really I think also we hear from the rumor mails whether you are using it for the full 3-D sensing or you are only using it for facial recognition. So basically there are two ways to use this pixel, one is a two big 100 pixel array and then a third one for facial recognition, and I think the big lasers which would used in all of substrate we don't know where they are at this point. So you know you could do the calculation and you know the old calculation was something like 10000 six inch wafer per month and you pick the nominal cost or selling price of this and there is a substantial uptick I guess for substrate market. I mean that's only a part of the cellphone that they deploy to sell to, but we don't hear that number anymore.

So maybe it’s a little bit slower. So if you go after 2019, so we will pass in our mind the two critical hurdles, which of course we don’t control. The first is the initial coming is going to use this VCSEL, is the application broadly accepted. And then the second is to people like Samsung bring up their own version of the VCSEL program to just stay competitive in the separate market. If those things happen and we are talking significant increase in the TAM for gallium arsenide and we believe that all three players will have a target by the TAM. So it is definitely going to be something has to be managed and its going to take a lot of management talent and a lot of production capacity. So percentage is and when they reach that point, we don’t know yet, I think you guys will figure it out sooner than we do probably.

I guess we will see, but tell us you guys have a great view point in the few chain as well. But I appreciate the sounds guys, that’s all for me. Thank you.

Thank you, Richard.

Thank you.

Thank you. I’m showing no further questions at this time. I would like to turn the conference back over to Dr. Morris Young, Chief Executive Officer for any closing remarks.

Thank you. Thank you for participating in our conference call. During the second quarter, I will be presenting at the 14th Annual Craig-Hallum Institutional Investor Conference in Minneapolis and I hope to see many of you there. As always, please feel free to contact me or Gary Fischer directly if you would like to meet with us and we do look forward to speaking with you in the near future.

Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program and you may now disconnect. Everyone have a great day.