Camtek Ltd. (CAMT) Q3 2015 Earnings Report, Transcript and Summary

Ladies and gentleman, thank you for standing by. Welcome to Camtek's third quarter 2015 results conference call. All participants are at present in listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. As a reminder, this conference is being recorded. You should have all received by now the company's press release. If you have not received it, please contact Camtek's Investor Relations team at GK Investor Relations or view it in the news section of the company's website, www.camtek.co.il. I would now like to hand over the call to Mr. Ehud Helft of GK Investor Relations. Mr. Helft, please begin, please?

Thank you and good day to all of you. I would like to welcome all of you to Camtek's third quarter 2015 results conference call and I would like also to thank Camtek's management for hosting this call. With us today on the line are Mr. Rafi Amit, Camtek's Chairman and CEO and Mr. Moshe Eisenberg, Camtek's CFO. Rafi will provide an overview of Camtek's strategy going forward. Moshe will discuss then the recent development and summarize financial results in the third quarter. We will then open the call to take your questions. Before we begin I would like to remind our listeners that certain information provided on this call are internal company estimates unless otherwise specified. This call also may contain forward-looking statements. These statements are only predictions and may change as time passes. Statements on this call are made as of today and the company undertakes no obligation to update any of this forward-looking statements contained whether as a result of new information, future events, changes in expectation or otherwise. Investors are reminded that the actual events or results may differ materially from those projected, including as a result of changing industry and market trends, reduced demand for services and products, the timely development of new services and products and their adoption by the market, increased competition in the industry and price reductions, as well as due to other risks identified in the company's filings with the SEC. Please note that the Safe Harbor statement in today's press release also covers the content of this conference call. In addition, during this call certain non-GAAP information will be discussed. These are used by management to make specific decisions, focus future results and evaluate the company's current performance. Management believes that the presentation of non-GAAP financial measures is useful to investor understanding and assessment of the company's ongoing co-operation and prospects for the future. A full reconciliation of non-GAAP to GAAP financial measures is included in today's earnings release. And I would like now to hand over the call to Mr. Rafi Amit, Camtek's Chairman and CEO. Rafi, go ahead, please.

Thank you, Ehud. Hello to everyone and thanks for joining us today. We are very pleased with our results on both the top and bottom line as well as the cash flow. Our revenues grew 17% over those of last year to $26.3 million, the highest level of revenue in the quarter for over four years. Our operating income was $1.9 million, 72% increase over the third quarter of last year with operating margins at 7.1%. In addition, we generated $5.4 million of cash from operating activities. These results were driven by strong semiconductor sales, in particular solutions to the advanced packaging market as well as CMOS Image Sensor and MEMS sectors. In this business, over the past two months we have had a number of successful penetration with our Eagle system into customers to which we have never sold systems in the past. Despite what we are hearing with regard to general equipment spending, at this point, we see the advanced packaging part of the semiconductor space continuing its strong growth and ongoing and increasing demand. In the PCB market, the AOI business remains stable and our focus on the high end customer positions as a leading supplier in this segment. We see our digital printing technology as a future driver of growth with significant potential in this business. Looking ahead, we expect strong fourth quarter similar to the third quarter and we are well on target to ending 2015 with around $100 million in revenue and a 20% growth in our semi business as we projected at the beginning of the year. Moving into more details on our semiconductor inspection and metrology business, sales in Q3 expanded for four quarters in a row. The growth this year is evident in all our major market in this segments, the advanced packaging CMOS Image Sensor and MEMS. During the last quarter, we experienced strong demand in Taiwan and China. As we discussed last quarter, the trend to bump wafers instead of wire bonding is increasing and accelerating. During the fourth quarter, we penetrated and installed systems at two new significant accounts and we expect to generate substantial business from these accounts in 2016. Our R&D team invested lot of efforts into expanding the capabilities of the Eagle family and to support our customers with special features that can help them meet customers' requirements. In order to meet the growing demand for our system, market's request for shorter lead times and specific customers' features, we have doubled our clean room space in our facility in Israel. While we are seeing CapEx cuts at some of the major industry players, at this point our market segments are less sensitive. We believe that the specific segments in which we are the major player, in particular the advanced packaging segment, will continue to grow on an absolute basis as well overall portion of wafer fabrication equipment spending. We are currently working hard to build and deliver customized Eagle system for key strategic and important leading semiconductor manufacturers. The customization process extends the typical bill time for an Eagle, so some of these orders take longer than usual to ship and are line up for installations in the first quarter of 2016. I would expect that fourth quarter sales are in line with what we did in the third quarter. 2015 has indeed turned out to be a very strong year for semiconductors sales and as I said earlier, we expect to close the year with 20% growth in our semiconductor business. Regarding the AOI business for the PCB market. In general specifically in the IC substrate segment, our high end customers are investing a lot of efforts in new technologies for advanced IC carrier and embedded IC. We are supporting the R&D efforts of our customers with 2D and 3D integrated AOI and new features. During Q3, over 50% of our business came from five customers from the top 10 PCB manufacturers. As part of our ongoing penetration effort of the Gryphon, we have made some organizational changes to the structure of our AOI and digital printing business. We have integrate the two product lines, inspection and digital printing, under one business unit. Amir Tzhori, who currently leads the PCB Division will be the head of this merged business unit. Each product line has its own R&D and operation teams, but the sales, marketing and management are run by the same team. We believe that this change will improve the communication between the sale and R&D. Hence the sales will get quick solutions and Gryphon will fit most the customer requirements more effectively. Our strong market position amongst AOI and PCB market opens many doors for the Gryphon. The close relationship with our AOI customers are a key factor in enabling us to bring the Gryphon to the market. We currently have four system with customers, one of which is now being used activity in production and shipping finished products with printed soldermask and legend to the customers and the rest are under evaluation process. We are collecting ongoing feedback from these four customers and the end-user of these customers. The comments we have collected so far led us to allocate all the resources to meet this particular customers and the end-user requirements before we continue to approach new customers. We expect this process to take several months and as a result we now do not expect sales of Gryphon before the second half of 2016. This doesn't change our confidence in our digital printing technology which we see as a revolutionary and disruptive knowledge. With that, I would like to hand over to Moshe for a more detailed discussion of the financial results of the quarter. Moshe?

Thank you, Rafi. As Rafi mentioned, we are very pleased with the financial results of the third quarter which were ahead of our expectations. Third quarter revenues came at $26.3 million. Revenues were 17% above those of the third quarter last year and 4% over those of the previous quarter. This is the fourth quarter of the consecutive gross and our highest quarterly revenue in four years. Revenue from sales and services to the semiconductor industry in the third quarter were $18.8 million, representing 71% of our total revenues. Third quarter revenues from sales and services to the PCB market were $7.5 million, representing 29% of our total revenues in the quarter. The geographic revenue split for the quarter was as follows. China was the strongest region during the quarter representing approximately 37% of overall revenue. Taiwan was 26%. U.S. sales were 13%. Korea was 10%. Asia, excluding China, Taiwan and Korea was 9%. European sales were 5%. Unless otherwise stated, I will summarize the rest of the results on a non-GAAP basis. The reconciliation between the GAAP and non-GAAP results appear in the table at the end of the press release issued earlier today. Gross profit for the quarter was $11.8 million, representing a gross margin of 44.9%. This is compared with a gross profit of $10 million, representing margin of 44% in the third quarter of last year. Operating expenses in the quarter were $9.9 million. This is compared with $8.8 million in the third quarter of last year. Operating profit in the quarter was $1.9 million, an increase of 64% over the $1.1 million reported in the third quarter of last year. Operating margin was 7.1% versus 5.1% in the third quarter of last year. Net income for the third quarter of 2015 was $1.2 million or $0.03 per diluted share. This is compared to a net income of $948,000 or $0.03 per share in the third quarter of last year and net income of $825,000 or $0.03 per share in the previous quarter. Cash, cash equivalents, short and long term deposits as of September 30, 2015 were $37.1 million, out of which $7.9 million were restricted deposits, compared to $32.1 million as of June 30, 2015. The main reason for the increase in cash was the positive operating cash flow, which amounted to $5.4 million during the quarter. Collection from customers was strong and despite the growth in revenues over the last quarter, the accounts receivable balance has dropped by $6.7 million during the quarter. As a result, our DSO has also dropped to 88 days. For the fourth quarter of 2015, we expect revenues in the range of $25 million to $26.5 million. We will now open the call for questions. Operator?

[Operator Instructions]. The first question is from Edwin Mok of Needham. Please go ahead.

Great. Thanks for taking my question. And congrats for a great quarter. So first just a focus on semi space. Looks like you guys are doing quite well and I think you mentioned on the prepared remarks that the two new accounts that you penetrated, right. Are those account contributing revenue yet? Or if my understanding is correct, that's more a driver for 2016?

Are you talking about the two new customers?

Yes.

Definitely they contribute to revenue, okay. But we expect sometime they, let's say develop a new concept, a new technology they use it for this machine, for writing this technology and later on they ramp up and they need more machines. So we expect in 2016 to see more business from these two customers.

I see. Okay. Great. So thanks for clarifying that. In terms of hard market condition that you mentioned, there is some concern about weaker spending in the coming quarters. And I think you mentioned that advanced packaging it seems has found demand there. is there a way you can now quantify how much of your business now is advanced packaging versus CMOS Image versus MEMS?

Look, I would say right now in general it is about over 50% go to what we call bump wafer/advanced packaging and about 50% goes more to CMOS Image Sensors, MEMS and other 2D applications, roughly.

I see. So it's roughly around 50/50. Great. I think your competitor announced a new product recently, in the last few months. Just wondering if you have seen any kind of changes in the competitive dynamics on that market? And what kind of feedback have you seen from customers since that announcement?

Sorry. What is the question?

The question is, have you seen any change in the competitive dynamics since competitor announced a new product? Have you seen any change?

No. Look, first, I can't tell you that we see any changes. Just talk in general, we just can tell you that some time to pass qualification and to help assistance to customer can take even a year. You start with R&D process and make a lot of improvement until the technology becomes mature and you follow with more feature or new feature. So R&D supports this process. So I can't believe that any competitor with new device can immediately risk our market share or our business. Definitely it takes time and on the same and in parallel, we also do a lot of changes and improving our system. So this is right. So right now we feel very confident with our position, I would say. We believe we can maintain, definitely at least maintain our market share. In some cases we believe we can increase our market share.

Okay. That's helpful. And then on the Gryphon side you mentioned you have four systems all installed right now. Are all four of them Gryphon SL? Has the customer move all of them to Gryphon SL? And then just a follow-up question around that. You mentioned that you guys are taking this process of using customer feedback to improve the system, basically that's my understating of it, do you expect it to retrofit on those four systems? Or are these feedback where you have to go back and have a new system that you have replace at those four customers?

I would say that it's very depending on customer. What we have found actually that we selected customer that represent some segment like prototype segment, like the HDI segment. So we selected the customer to gather and collect more feedback depending on the segment that this specific customer is very strong. And we found that there are so many demands and this industry doesn't really work on one standard. There are many standards and this does not only relates to all direct customer because each of our direct customer has hundred of end-user customers. And all these customer also come with special demand. So when you collect all these this is many demand. Now Camtek is a very respectable company. First of all, we want to be sure our direct customer happy and enjoy the system. So we have to fulfill their demand and their end user demand and it takes time. And we right now, would like to focus on this four customers with end user and when we feel comfortable that we can answer to most of the demand, we can later on continue and accelerate the sales efforts. So by the end of the road, I assume that all these four customer definitely will take the machine, will use it effectively and enjoy. But as I mentioned before, it takes time and we are patient to do it.

I see. And these customers have all being converted to Gryphon SL, the two color machine?

Yes, definitely. All of them are using, they insist on using the two colors. Definitely.

I see. So as of right now, you didn't have any revenue from this single color machine because basically they were replacing them with two color machine. Okay. Great. Wanted to asks a question, just on the financial side, how do you think about OpEx as we go into the fourth quarter and going to the next year? And in terms of gross margin, are we looking at similar margin range in the mid40s?

Yes. At least looking into the fourth quarter, we are seeing pretty much the same gross margin profile as it was in the third quarter. With respect to operating expenses, we expect it to be the same or slightly below those of the third quarter. Thus we may improve profitability on the revenue in Q4.

Great. That's all I have. Thank you.

The next question is from Craig Ellis with B. Riley. Please go ahead.

Yes. Thanks for taking the question. A nice job on the quarter and with the cash management, guys. Rafi, the first question for you and just following up on some of the discussion on Gryphon. Given what you are seeing with the trials of the four customers, how does the data collection impact your views on product evolution over time? Is it likely that we will see other configurations of the product? Or perhaps different modules or optimizations for different types of customers?

Okay. I would say, in general, each customer has a different story. One customer would like to have a special profile, the soldermask and we have to develop a special Gryphon for his own demand. Especially when we believe that that demand will be requested by other customers. That's just one example. Another customer for example can design a panel that would do any type PC board and the way bow this PC board are placed in this panel are not or is not predicted. So you need to manage a lineman and how to organize it. So we can see more and more, I would say, demand that take resources to answer for these demand and it takes time. But I believe that by the end of the day we recover most of the demand and then we can expand our potential market and accelerate the revenue. So we prefer right now to use most of our resources on the support. We have more customer that push us to install our systems, but we are not sure if we can support in parallel so many customer and requirement. So we try to fit our resources to the amount of demand in the market. So our sales fore and our technical people sitting in with customer, working with the customer, collecting data, we have everyday a conference call with R&D, concerning the data, give priority. This is the way how we manage this process.

That's very helpful color. And is it fair to say from your comments then that some of the optimizations will be in software, while some maybe in hardware?

I am sorry. I am not understanding the question correctly.

Always you work to customize the product for customers, it sounds like some of the customization is software-based relating to algorithms that maybe specific to their workflow. It wasn't as clear to me as some of the optimizations would be hardware in nature.

Would be what?

Hardware?

No. I would say, in general, we are [indiscernible]. We talk all the time about machine, material, the ink and the process. Okay. Like three element in this technology. So sometime we have to adopt our process to customer depending how the customer prepare resources before the panel comes to us. And we can improve it by having a special treatment that can make the printing better. Other customer may be needing a special alignment or a special algorithm to go between line and to fill in certain height. So in this case, we have to increase the QC to play with algorithm. Other customer would like to see some glossy appearance and not matt appearance. So it's again some these are algorithm. There are many parameter and many demand. But I would take in general, most of them probably this is the type of the industry many customer, many requirement, customer used to see something, they would like to see the same with our technology and we try tool to make it is as possible similar to what they used to see. So I don't think it's a changing part of doing the small calibration at software. Sometime it may be playing with the formula a little bit, viscosity less or more, so using the better to change the pixel size, to increase the resolution. But most of it is not harder issue, it's more of software, algorithm, calibration, formula being additional or adding some, changing the concentration of the process. This is the area. The machine in general can meet most of the demand. We can improve the QC. We can improve before we ship the machine. This is not the big issue. So we don't see any risk of machines or to redesign. This is not the point.

That makes sense. A follow-up question is back to the comments on the secular shift towards advanced packaging from wire bonding. Was the point there that you are seeing a steady tailwind from that dynamic as you look at the back half of the year and into 2016? Or was the point more that there is an inflection with more help coming from that secular shift as you look ahead than what you have see year-to-date in 2015?

Moshe, could you [indiscernible]?

Craig, can you repeat the question for me please?

Yes, the question was related to a comment that made earlier on strength in advanced packaging with the Eagle system. And I think the statement was that some of the strength was due to just the secular shift from wire bonding. The question is, is that something that is increasing via tailwind or accelerating as a tailwind as you look ahead? Or is that something that's a steadier course?

No, it's actually accelerating. According to the data that we are collecting for market researchers, we see an increased demand and increased trends from wire bonding to bumping. So actually the way we see it, Camtek will benefit from this trend in the future as well.

Okay. Thanks for that, Moshe. And then lastly --

I am sorry. I would like maybe just to make one, because we didn't mentioned it specifically, but when we talk about advanced packaging, there are manly applications. I think one of the application that was discussed in the many magazines recently talking about what we call integrated fan-out. So the idea is to place like a mix of chip, like memory, like logic, like [indiscernible] under one system in package and to make all the connection with process and not with assembly. Now many, many I would say companies, so fronted and also backend working on such solutions and some of them are still in this stage, but some of them definitely got qualification from their end user and they start ramping up because they have to ship a lot of quantities next year. So I believe that we are deeply involved in most of such projects and a decision that this specific design is going to move to production in the beginning of next year, definitely affects our forecast in sales.

That's very helpful color, Rafi. Thank you. My last question, Moshe, after a very strong quarter for cash management, what's the expectation for cash in the fourth quarter? Can it maintain the current levels? Or will you need to some for working capital purposes in the first quarter's revenues?

Right. So third quarter was exceptionally high, some due to extremely good payment terms and some was a catch-up from the first half of the year where the cash was slightly weaker. As we are entering the fourth quarter and we see more demand and more requirements for working capital, we don't think that cash flow in the fourth quarter will be different.

Thank you very much, guys.

The next question is from Marc Estigarribia from Chardan Capital Markets. Please go ahead.

Thank you for the question. Congrats on the numbers. It's Marc Estigarribia from Chardan Capital. Can you please comment on the margins, the longer term margin outlook? Is it possible to achieve a level of 8% or above going on this upward trend that you are reporting already?

The first element that's affecting margin is obviously the gross margin. We don't see any major change as we enter 2016. We believe that mid-40s is still a good margin for Camtek. The other elements that may be affecting operating expenses level is the litigation process with Rudolph. If we don't incur a lot of IP related expenses, we believe that we will be able to improve operating margin towards 7% or 8% in 2016.

Great. Thank you. Commenting on the outlook for the PCB segment, is it still around 35% in 2015? Is that breakup expected for next year? I am just looking for some incremental revenue margin that the new system of Gryphon can bring on to the segment?

First of all, the PCB segment accounts for approximately 30% in 2015. We believe that this level of percentage will remain also in 2016. I don't think that there will be a significant contribution of the Gryphon in 2016. At this point, we focus, we project that material sales will begin only in the second half of 2016. So as a result, the contribution in general will be insignificant to the PCB portion. So I would say, we look at $31 million, $32 million of sales in the PCB next year.

Great. Thank you. And the outlook for the semiconductor space with regards to the lower forecast from the market tops barring any sort of impact for Camtek. Can you just speak to that in terms of maybe visibility into the fourth quarter seasonality and going into your outlook for 2016, please?

So the way we currently look at -- I think our guidance speaks for itself. We look at pretty similar level of revenues coming from the semiconductor space. We reported this quarter $18.8 million and I believe that the number next quarter will be quite the same between $18.5 million to $19 million. We do have order in hand for more systems. As we mentioned and as Rafi mentioned earlier, the customization process this quarter takes longer and we have more systems that require specific features that we are developing for customers. So some orders will basically spill over to the first quarter of 2016. We still don't have a good enough outlook visibility into the first quarter of 2016.

Okay. Just lastly, with regards to Asia and sort of an outlook of what you are feeling. We are getting a lot of news obviously in the space with regards to some demand resumption for a lot of activity out of China. How does that impact you in terms of a macro look? Are you sort of insulated from that? Are you seeing any sort of upward trend for the quarter that we are in right now?

No. I don't think that -- we discussed it with our direct customer, okay. Even most of them do not really affect the macro economy talking the situation and that's what we said all the time. We read all the newspaper. We understand what everything talking about this. But since our visibility is few months ahead and so we can get from customer what is the budget, backlog, orders, based on that we can predict what is going to happen in the coming months. So right now we feel comfortable. That's a reality.

Okay. Thank you so much. I appreciate it.

The next question is from [indiscernible]. Please go ahead.

Hi Rafi. I was in Los Angeles last year where I met you and we discussed the Gryphon and you had said that the Gryphon would start to take off in 2015. Coming to 2015, in the beginning you started push it off towards the second half talking about 30 machines that you could ship in the second half of 2015. Now we are in the end of 2015 and you have told us that you won't be shipping anything basically until 2016 at the end, second half of 2060. Could you maybe give us a better sense of what is going on here? Because I think without Gryphon, I don't really see Camtek doing very much in terms of the valuation that Wall Street is willing to give it? And given the fact that there seems to be just a push off after push off after push off, why do you have any confidence whatsoever that at the end of 2016 people are actually going to order this product? Thank you.

This is a good question. But look, as I mentioned, Gryphon is not just another piece of equipment and it is a process. And even for us, we cannot predict everything and when we get all this forecast after we made few evaluation, we get feedback and based on this visibility, we have to do ABCD. When we expand the install base and you see more customer and then we go to more end-user, we see demand. I just can give you some example. This industry, unlike the semiconductor, it doesn't work on a very clear standard. They want their IPC number, so you get qualification and we meet all this IPC you held but many customer do not follow this specific standard. They do not follow. They use different chemicals. They cannot control heat. The do many things that you cannot predict because you go to the mainstream, you go to what you know from the standard from some customer and then when you start installation, you find that there are more demand, more customer. So one way to say this, I am not going to this specific segment, I get rid of this specific segment and you start to shrink your potential market. So we right now try to struggle and to decide if to try serve all type of markets or to try to focus on specific markets. Moreover, if it was only between us and the PCB manufacturer, it was very easy, because we know very well this industry. But the main problem that we have to convince their end-user and this is a very conservative industry and it's not easily happen to convince them to use this process, although it is already approved. And we don't have direct connection with this end-users. So found that this takes more than we expect. This is why right now we push out. And just to be fair with all of you, Camtek is not a startup company that it can afford installing many system and later on try to maybe risk relationship with customer. We go to very old customers that know Camtek and they know the product, the AOI and we don't want to spoil our relationship. So we prefer to slow down rather than to accelerate it and then have a lot of problem with this customer. So this is exactly the situation right now. But we feel, when you say why I feel so optimistic about this, because first of all, I understand very well the industry and the amount of occupation and I know very well how difficult for the industry to meet the new specification, the new resolution, the demand, it is almost impossible to do it in the current technology. So the digital printing definitely can answer to many application, not only soldermask and laser. There are many other applications. And we know very well that our system can meet more than on application, maybe four, five or six application. Right now, we focus on one specific, in soldermask and laser. And we have one customer, the chip and deliver finished PC board and we feel very comfortable. We have to go to other customer and try to feel their demand and hopefully we can do it. So I have no doubt about the technology and the product. I think what we cannot predict is if it takes few weeks, few months. But I don't think it's more than three or six months to be totally ready with this. So we feel we are very close to make all this four installation very happy.

Okay. Thank you, Rafi, for that overview. How many machines are in inventory right now? When we look at the inventory number on your balance sheet, how many machines of that is in the --

It is [indiscernible]. I would say, we are right now at about four customer, two still in demo centers. So it's right now about seven machines out of Israel or in Israel, including demo. And we have about four or five machine ready for shipping and there are all still our partial assembled. So this is right now the status of the machine. And when we get some qualification, when we pass satisfaction at those customer, we can move very quick to accelerate the sales.

Okay. And do you expect to get an order in the first half? Or do you expect only the second half to get an order than the first half? [indiscernible].

Right now, I can get about two to four additional orders, but for each order right now that I need to allocate R&D resources that I am not sure if I can do it. This is why we said hold. Don't give us right now order. You give just a few time, a few weeks to try to fulfill some demand and later on give us the order and we ship the machine. So order definitely we can get, but we don't want to make quantification too long. I think qualification should be three months to six months, not a year. So we don't want to start with too many machines along for evaluation. So I believe that if we start to ship machine in three to four months from now, the qualification and evaluation period will be much longer.

Okay. All right. Thanks very much.

[Operator Instructions]. There are no further questions at this time. Before I ask Mr. Amit to go ahead with his concluding statement, I would like to remind participants that a replay of this call will be available on Camtek's website, www.camtek.co.il, beginning tomorrow. Mr. Amit, I see there is one more question. Would you like to take it?

Yes..

Okay. The next is from [indiscernible]. Please go ahead.

Hi. I am an individual investor. Can you shed some color on the litigation with Rudolph Technologies? What's going on there? I have been an investor in Camtek for about two years.

Moshe, do you want to?

Yes. Let me address this question. Camtek is actually involved in two processes with Rudolph regarding two machines. One is the old platform, which is the Falcon. This is the ongoing litigation since 2005. The current status of this litigation is that Camtek has appealed to the Federal Court of Appeal in Washington DC last March on the Minnesota Court decision to grant $14.5 million in monetary sanctions against Camtek. We believe that we have strong arguments with the Federal Court and we believe that by the end of this process, Camtek will prevail. The other process is just at the beginning of it. This relates to the new Eagle product line. We actually believe that there is no merit to the litigation, but as I said we have just started the process in the last few months. So this is the current litigation process.

So is there a hearing scheduled for the first quarter of next year?

There are many small sub-processes throughout this legal process. I am not sure that there is anything meaning for investors at this point, except for the hearing of the appeal, which is not yet scheduled. But it is expected towards the mid-2016 year.

Thank you so much.

There are no further questions at this time. Mr. Amit, would you like to make your concluding statement?

Okay. I would like to thank you for your continued interest in our business. We intend to present to investor and analyst at the Needham Growth Conference in January and we look forward to seeing some of you there. To the rest of you, I look forward to talking with you again next quarter. Thank you and good bye.

Thank you. This concludes the Camtek third quarter 2015 results conference call. Thank you for your participation. You may go ahead and disconnect.