Good day, ladies and gentlemen. And welcome to the II-VI Incorporated Q4 and Year-End FY19 Earnings Conference Call. At this time, all participants are in a listen only mode. Later we will conduct the question-and-answer session and instructions will follow at that time [Operator Instructions]. As a reminder, this conference call is being recorded.I would now like to introduce your host for today's conference, Ms. Mary Jane Raymond, Chief Financial Officer. You may begin.

Thank you, Skylar and good morning. I'm Mary Jane Raymond, the Chief Financial Officer here at II-VI Incorporated. Welcome to our fourth quarter and year-end earnings call for fiscal year 2019. With me today on the call is Dr. Chuck Mattera, our President and Chief Executive Officer and Dr. Giovanni Barbarossa, our Chief Technology Officer for fiscal year '19 and for fiscal year '20, our fiscal year, our new Chief Technology Strategy Officer as the President and our new segment to be called Compound Semiconductors segments. This call is being recorded on Tuesday, August 13, 2019.Just as a reminder, any forward looking statements we may make today during this teleconference are given in the context of today only. We do not undertake any obligation to update these statements to reflect events subsequent to today.With that, let me turn the call over to Dr. Chuck Mattera. Chuck?

Thanks, Mary Jane. Good morning, everyone. And thanks for joining our call to review some of the highlights of our fiscal year '19 and the perspective view of our first quarter of fiscal year '20. Before we get into it, I want to thank the members of the investment community for engaging us so much since November 9th, and getting to understand our value propositions, core competencies, sources of sustainable competitive advantage and more about our company culture. I'd like to use a few minutes before I get into it to provide some context.Fran Kramer and I transitioned the President and CEO role three years ago. Since then, we have carried on in the II-VI tradition of building long term shareholder value, employee value and customer value one day at a time. It's been a remarkable three years as we embarked on our current transformative growth phase. Our fiscal year '19 was punctuated by growing markets underpinned by large and the irreversible mega trends that we believe will allow us to enable our growing list of customers to win in their markets.Up against this backdrop, we not only delivered solid results, we completed two acquisitions each in the optical communications and aerospace and defense businesses. We completed a strategic collaboration to manufacture again on silicon carbide devices. We received many distinguished service awards from key customers. And we continued our leadership development and succession planning to be sure that II-VI maintains the top talent pool to oversee the strengthening of our enterprise wide culture. And we continue to be a company to which people want to dedicate their time and talent.Our pending acquisition of Finisar has added a substantial engagement with the Finisar team around integration planning of another 30-plus year industry leader who's engaged employees at the core remarkably…

Thank you, Chuck, and good morning. 2019 continues as the great year of growing demand for several of our engineered material platforms. Silicon carbide substrates, CVD diamond optical windows and semiconductor lasers were in a high demand, enabling a broad range of rapidly building applications, such as datacenter communications, 5G wireless, EUV developing, 3D sensing, electric vehicles and high energy laser systems.It's now been 20 years since we begun working on silicon carbide, leading to the introduction in 2018 of the world's first 200 millimeter substrates. This year, we began to ship this large substrates under a program funded by the European Union tasked with developing an ecosystem for silicon carbide based power devices, producing 200 millimeter wafers to serve buyers' markets, including electric vehicles. Revenue from silicon carbide substrates now constitute 6% of our total revenue and continues to grow rapidly.Last quarter, we entered the second phase of the development of our 6-inch gallium nitride on silicon carbide wafer fabrication capability in Warren, New Jersey to serve the high performance RF market. At the same time, we see that we're again expanding the manufacturing capacity of our semi-insulating silicon carbide substrate to meet the new internal and external demand. For all silicon carbide substrate production, we have doubled the capacity 3 times in the last five years.We have also begun to explore gallium nitride on diamond RF electronics for emerging applications, such as in satellite communications. As the demand for gallium nitride on diamond materializes, we will be able to leverage our diamond manufacturing capacity, which we prospected in scale to fulfill a five year agreement that we announced this year with a major customer in the supply chain for EUV lithography equipment.Our, CVD diamond technology platform demonstrate our preference for technology investments, which will enable differentiated products for…

Thank you, and good morning. Our press release follows our usual format with the total company numbers for the fourth quarter and the full year on the second page and then the segment information follows on the third page.We have updated all the operating margins for the segments and the Company to adjust for all non-GAAP elements, not just acquisition related expenses. These are now all adjusted for stock comp and amortization also. We are reporting our quarter and full year in our fiscal year '19 three segments. The 10-K will be filed this way as well. We will produce a historical result table for the new two segments by mid-September.Revenue growth of 13% in the quarter was 8% on an organic basis. Revenue growth of 18% for the fiscal year '19 was 14% on an organic basis. Regionally, for FY19, North America was about 40% of the total, Europe was 20%, China was 22%, Japan was 9% and the rest of the world was 9%. All major regions grew in double digits. During fiscal year '19, China led the growth regionally at 30% over fiscal year '18, Japan grew 28%%, Europe grew 14% and North America grew 11%.The Company's overall gross margins for Q4 was 38.2% and 38.3% annually. The operating margin was 11.2% for the quarter on a GAAP basis and 10.9% for the year. Whereas the non-GAAP operating margin was 15.7% for the quarter and 15.4% for the year, advancing 80 basis points and 50 basis points respectively compared to their same periods last year. Regarding the segment adjusted operating margins for fiscal year '19; laser solutions was 12.4%, slightly higher than last year; photonics was 16.7%, 40 points lower than fiscal year '18; and performance products was15.5%, 150 points ahead of last year.The main non-GAAP adjustments…

[Operator instructions] Our first question comes from the Samik Chatterjee with JP Morgan. Your line is now open.

Can we just start with a quick temperature check on the two key end markers that you referenced the industrial and the fiber optics or wireless communication, as you refer to it? I mean you mentioned the strength that you are seeing in optical communication, as well as aerospace and defense. I'm just wondering given some of the weaker industrial metrics we're seeing, where are you seeing maybe pockets of weakness in those two?

So as we said, I think your question is to then illustrate industrial. So as we said, industrial was relatively flat for the year. If you remember last year, during fiscal year '18, industrial saw some really serious unprecedented growth. I mean, it is not typical for the industrial market to grow 20% for the year -- and we basically -- the market sort of coming out of that peak. Generally, I would say that as you have heard perhaps from others, there's a little bit less demand for new machines in some geographies around the world. We are still seeing reasonably good laser usage, which in our case is typically the driver of the aftermarket sales. But I would say that probably if you think about a growth we saw in 2018, we have the world pretty much adjusting the use of those systems. Giovanni?

Yes…

Can you maybe give me some color, similarly on the wireless communication side? And we're seeing the strength led by the infrastructure investments. Are you seeing any slowdown given the sanctions on Huawei? Are you seeing any slowdown on that side of things?

So with respect to just other communications, in general, when we talk about -- or communications in general, first of all, it has been a very, very good year. And as we had noted back when first restrictions on Huawei came out, the restrictions were a ruling, they want it banned and we were very, very careful in looking at what we were able to do. We would have said that we are seeing with that sort of growth, that we are really in the beginning of the 5G build out. That looks to us to remain well on its way, whether that in the future, in the next few quarters, starts to move downward for other geopolitical tensions, as what Chuck mentioned. But generally speaking, it's been a very-very good year in communications, in general. Go ahead.

Samik, this is Giovanni here. Whether it's 4G or 5G, the drive for our technologies, which play into those markets. I want to remind you, we have semi-insulated silicon carbide substrate that are used for amplifying, we're doing base stations. We obviously have all of the optical communication infrastructure that feeds into the 5G and 4G wireless infrastructure and so forth. So if you look at the entire demand for our product that fit into the 4G and 5G, business been very, very strong.

Can I just have a quick follow up on the gross margin? I see on the slide deck you have a forecast or improvement in gross margins in fiscal '20, roughly to the 40% level. How much of that should we think about being an improvement driven by utilization of 3D sensing? And if there -- are there any other drivers that we think are driving that improvement?

Samik, this is Chuck. Thanks for joining us, Samik. I would say you hit it. 3D sensing, the utilization of our fab and our 3D sensing infrastructure will be a major contributor to the margin improvement.

I would also like to on the -- for the benefit of those on the call. From a gross margin point of view, one of the things we noted was the very, very nice growth we're seeing in aerospace and defense. Some of that, particularly from newer systems, particularly high energy laser systems, some of those arrangements are costs plus that does have the benefit -- the effect of a little bit of downward pressure on the margin, because they're costs plus versus fixed price. But generally speaking, Chuck's answer still stands, which is that the largest driver of the gross margin is 3D sensing. Go ahead please.

Our next question comes from Meta Marshall with Morgan Stanley. Your line is now open.

First question, just any change in the make-up of the order that you're receiving from China customers. I think we'd heard from other market participants perhaps move to lower speeds, or seen perhaps slowdown in orders not been able to get the full package, anything that you were able to note kind of along what the make-up of the orders were. And then second question just given the departure of the Finisar CEO. Like was that expected? Or kind of any changes to your kind of plans with Finisar post acquisition given management changes? Thanks.

Let me say in the first one. We were steady as we go in terms of the mix, the demand and the supply chain managers that we interact with in China. So we were worried that we might see a little bit of an interruption based on other people's reports of having suspended their sales. But our sales crews were long through the fourth quarter. I think what we're expecting is that we might see a shift to new products beginning in FY20 for various reasons. So we're stepping up our investments to be able to assure that we have new product platforms to offer the customers as well. And then as far as Michael Hurlston's departure, I would say that we have been able to -- thanks to the Finisar board and the executive team, and Michael himself, they've all been extremely supportive of our engagement for the planning that we need to do. And I would say that things on that front are going exceedingly well.

Our next question comes from Jim Ricchiuti with Needham and Company. Your line is now open.

Quick question on -- Chuck, I think he alluded to some acceleration from Q1 of $10 million to $20 million in the -- I believe it was the optical communications area. I wonder if you could just expand on that a little bit?

Well, we have a portfolio of products we can monitor with our interactions with the supply chain, people and our customers. We have a good sense for how much they want from us, including for a few quarters out. Our sense is that we were asked to sprint the marathon for the last three or four weeks in June. And some of that -- because we could and because we had timely expanded our capacity, we were able to serve them. And we think that there was a little bit more that we were asked to do in the fourth quarter and -- than what we were expecting. And we think that that probably came from simply a rebalancing on their side of demand from our Q1 to our Q4. And our judgment is just about $10 million to $20 million, that's the best I can say.

And then just turning to the industrial business, there's been obviously a lot of focus about demand and pricing in a laser market in China. And I'm wondering, are you seeing any changes in the pricing environment for the components that you supply customers in China in the industrial laser business?

Jim, this is Giovanni here. Nothing [indiscernible] is a very common trend in price declines and general pressure from the market on being remaining competitive. But I wanted to mention industrial that it's -- I would say that China and Europe, definitely weaker, and North America is actually strong. So when we say the general industrial market, I would say as a whole as we said it was peak and we will see it flat. But it's a combination of all geographies together, because there's definitely a price and activity in North America with very stronger economy.

[Operator Instructions] Our next question comes from Mark Miller with The Benchmark Company. Your line is now open.

Just wondering if you could break out the ROADM sales percent of total sales, what was the year-over-year growth? And maybe give us a little more color on the impact of Huawei in the fourth quarter, and what you expect this quarter?

So I think as Chuck indicated, the sales -- or the growth in communications was largely dominated by the growth in the ROADM component. So with respect to overall growth -- I mean I think they grew probably in excess of 50% for the Europe, as Chuck said. And also in terms of their proportion of the asset total, they are probably in the neighborhood of about 55% to 60% of general communications, which is about where they've been for a while.

Good morning, Mark. What was the second part of your question please?

A little more color on Huawei, and what you're expecting this quarter and what happened last quarter?

Well, let's see, we -- what we've said is that we were in the Huawei supply chains, but we have not been able to say more than that. They have been an important customer for us inside that supply chain. That was a driver in the fourth quarter. And I do expect it to slow down just a bit here as we enter into Q1 and that may be part of the story of this rebalancing or acceleration that I referred to earlier, that's the best I can do to give you some color.

Our next question comes from Sidney Ho with Deutsche Bank. Your line is now open.

With regards to your silicon carbide wafer business, I assume you also did not see any impact from the Huawei issue. But have you seen an acceleration of orders from your customers that would indicate share gains for them versus their competitors? And if so how do you plan on satisfying that demand?

Good morning, Sidney. This is Chuck. Let me try that. We believe, as we look out into the semi-insulating silicon carbide market, underpinning not just one and not just two, but probably three or four major adapters again on silicon carbide technology. We have been extremely busy expanding and shifting some of our capability to serve this semi-insulating silicon carbide market. Our view is that across the board the acceleration of the adoption of 5G infrastructure in addition to the normal pace of build out for 4G but in particular 5G is stimulating an awful lot of design and work around this technology by quite a few large incumbents. Does that help you?

And in follow-up to that, if you look at a, let's say, a over the next three to five years, what kind of cost improvements for silicon carbide wafers you to expect on an annual basis? And the reason I asked that is because it does seem like there are more competitors entering the market. Just for example the last week, we had a Taiwanese company coming in, so maybe broadly, how do you view the competitive landscape there?

I think first of all, as we will look out on the silicon carbide markets and we look at the demand we have from our customers, a lot of which is associated with long-term agreements, if not all of it, we look at what our plans are for capacity expansion, which Chuck was talked about in the past, comes in a number of ways, not just the addition of machines. We would expect, first of all, to be able to maintain the margins over that period as the market matures. While that probably has some interaction between the cost and the pricing of that, I get the first thing that's important to understand is that the innovation on how you makes silicon carbides come along with the markets increasing demand. And that's important otherwise the world would not have enough capacity. But let me hand it over to Giovanni to pick up from there.

Yes, we obviously had to remain competitive across the board, from a cost perspective and the quality and, capacity and so forth that. I want to just stay very important fact, that the ultimately, the quality of the substrate dictates the quality and for the yield of the final product. And the process of qualifying the substrate, it's time consuming, it's very long. And most of the customers, particularly the largest customers, we have, don't want, we believe they don't want to start what could end up being a real expensive cost reductions.So in other words, there could be a competitive cost wise at faster levels, which end up being not possible as we finished device level. And the fall, the substrate is probably not where the pressure is on costs, but it's actually more on the processing, infrastructure and so forth. So the process is going to be pressure to be cost competitive. By the time it took us, for example, with our most important customer to be designing with our substrate, it was a co-development minded it took up several years, and it will take even more years to be replaced by someone else.It was a very sticky process and as the market is ramping, cost is always important, but it's probably not the most important criterion to select alternative suppliers. So, we think that the, the process we went through with our customers basically demonstrated the quality, particularly our semi-insulating substrates. And we think that that explains why we believe we have the largest share of the RF market at this point with the silicon carbon substrates.

Maybe just switching gears to EUV step, can you talk about the lead times of your product that is as your product shifting today, are they related product shift by your customers a quarter out, three quarters maybe in longer? And have your dollar content changed overtime as the tools become more mature? Thanks.

Sidney, it's a great question. We believe that our lead times are probably among the shortest in the chain. When you look at the entire supply chain for the many products that we make in multiple subsystems of the tools itself, our understanding from publically available or disclosed communications by the end customer is that the cycle time for building these tools is really, really quite a long time as long as two years or at least one to two years including the burning times.So, we have been ramping and we have said that we believe that roughly 1% to 2% of the price of the tools is our share, both for initial components and then consumable components. We believe that has not change. We think time will tell us for example whether or not we have either an increase or the increase in consumable content. But based on what we know 1% to 2%, and I don’t think that we have because we talk to both our intermediate customers and the end user. And I think that we really don’t have an idea is to how long it takes for what we make to end up actually in somebody way for that but my guess is probably inside that one to two year time period.

Our next question comes from Dave Kang with B. Riley FBR. Your line is now open.

My first question is regarding your fiscal first quarter outlook, regarding the sequential decline of approximately $25 million to $30 million. Besides Huawei that you talked about, is there anything else that’s driving sequential decline?

Well, I think first of all what we said about our outlook was more than we were expecting that we may have some kind of effects of ongoing kind of geopolitical tension. I don't believe we said Huawei specifically about anything at all, but I think generally speaking and for us industrial as a general matter typically has a decline of that roughly 10% or more for industrial proper because a lot of same dynamic that actually drives, which is that typically machines going to summer shut down. So that’s one thing.It also from a military point of view, you start seeing that in fiscal year, we have quite a bit of an increase in our aerospace defense business and that may shift that seasonality a little bit, but those are really the main factors. And I think even in years where we have been questions when the optical cycle -- optical communication cycle has been growing about, no-no, we should really see seasonality in Q1. We did have seasonality in Q1. The year is still good. So, I think that’s really all there is to it. It's just the typical seasonality that we're expecting. But I think we have the….

So just to be clear because when Chuck was talking about like 10 million to 20 million acceleration in fiscal fourth quarter, I thought maybe that may now repeat. So that Huawei might be slowing down, I thought that's what you said but maybe not?

No, what I said was that, if we believe that inside this very strong fourth quarter that supply chain managers accelerated their request for us to ship. Based on our extraordinary ability to scale in the fourth quarter and to satisfy their needs, they asked us to ship what we believe is roughly $10 million to $20 million that we think would have come ordinarily either from the schedule first quarter or posting the schedule first quarter, maybe it's time to start before.

And my second question is regarding 5G base stations. I believe Huawei was looking into gallium and silicon carbide and also gallium and silicon. Have they decided which route they're going to go with?

Dave, we believe that the 5G infrastructure, the largest build outs of 5G infrastructure around the world, because our belief we will contain, will have the largest content of electronic based on gallium and silicon carbide. Sorry, not just one provider or not just one, one service provider, that's our belief.

And my last question is any tariff impact either to U.S. or to China?

Yes, give Mary Jane a second here, just to drink some water. Okay, Mary Jane, would you want to…

Any tariff impact sure, and what we've commented was the tariff on the year or the quarters, but not particularly material, that is the answer. It wasn't particularly material. But I would not like to leave you with the sense of, there was zero. It would take us though as well. One, two, three, four things that are immaterial can still be collectively immaterial, if they keep going. However, where there is you know seven, eight, nine immaterial things that could start to add up. But right now, the impact of tariff is relatively immaterial, if we take them collectively as they apply to II-VI whether it has been China or the U.S.

Our next question comes from Paul Silverstein with Cowen. Your line is open.

Some clarifications before broader question, first of all, Mary Jane responds to the previous question. Your answer, I think, was largely backward looking the short question would be now the tariffs are going up to 25%. Does that change the equation going forward? I chose the answer is still not meaningfully, individually or the collectively did have an impact and it got sort of clarification with the broader question?

Yes, that's right. When we put the first comment out that we thought tariffs will be relatively immature, we included what would happen if the tariffs moves to the 25.

Okay, moving on. Your photonics book-to-bill and your performance products book-to-bill like trust from the previous commentary that you are not concerned by we should not be concerned with the fact that the book-to-bill ease off about quite a bit. Is that the pull-forward of the revenue that Chuck alluded to you had mentioned? Is that normal seasonality? What's going on there?

Yes, I would say the basically, there's three things that are affecting the book-to-bill across the segment. One was, right, on one hand, the revenue itself was high. So that changes the math of the equation of the book-to-bill ratio itself. The fact that they were higher booking particularly strong performance products in Q2 and Q3, we've always said bookings are little bit lumpy, but bookings were huge in especially the performance products in Q2 and Q3. And that as Chuck said, roughly $10 million to $20 million of revenue that would have normally been in Q1, let say. Would have been in Q4 the booking, but in fact would be what we would have told the bookings shift, they came in and we shifted.

Alright, so let me ask more broader question. If you look beyond 90 day periods and we look out through the full fiscal 20 beyond, what are the greatest upside opportunities? And I recognize you all have a lot of irons in fire, you always have and it seemed to be growing. But what are the greatest opportunities? And what are the greatest downside risks?

Well, I think we're all -- help me here. I think generally speaking, I mean, one of the things that's really scouting is that the growth market that we've targeted in silicon carbide, EUV 3D sensing are really starting to move. And we continue to see, again not only growth for example in silicon carbide in power, but we're also seeing on the semi insulating side for RF. So, those really take the route or varied route having for optical communications obviously moving into the beginning of 5G, its super exciting given the potential for that to be a trend front.In industrial as well, I mean, Giovanni gave a lot of really fantastic color on many of the innovations in advanced machining that are dependent on laser power, not withstand and there is fiscal year 19 was a little bit of a flatter year. All of these things drive for countries around the world, not just individual companies, right, the ability to advance the knowledge economy, advance industry 4.0, et cetera. So, net-net, it ends up making us pretty excited about a lot of sense.Having said that, anything that disrupts trade is disruptive, and you can't get to the point where people are uncertain and therefore just paused and how they are buying things are planning. So, consequently, we do worry about the ongoing political tension and certainly look forward to them being resolved satisfactorily. And I think generally speaking, there is any number of things that can happen. We just talk about new competition, geopolitical, economic et cetera, but I would say we're fairly excited about all of them. Let me see what Giovanni would like to add.

Yes. I'm concerned about relations those well notwithstanding, we're still very excited about, generally speaking the optical communications, the upside potential there across the board. The 5G, silicon carbide, electric vehicles, high-energy lasers where we have been gaining shares there, but there also the 3D sensing. I just want to remind everybody just a couple of years ago, we had zero trade.So, obviously someone has been losing share out there and we've been growing it. And we continue to grow our share in the 3D sensing market. And as we said during this script, we anticipate that for the fiscal 20, our 3D sensing revenue will be higher than the fiscal 19. So, we will keep growing and we will adapt to, which I just said, the other technology platforms, which we believe will be boosted by, what we call, irreversible mega trends which we don't believe was rolled down in the next two years.

Hey, Paul, good morning, this is Chuck. I'd like to -- in particular, I'd like to come to the optical communications base make three points. Number one, we continue to see in '20, as we did in '19 and then '18, a really strong up cycle line under the communication network deployments. And we believe that we're extremely well positioned with our portfolio. We believe that will see growth in '20 over even over '19, which was a strong year to begin with. We're sold out as it relates the 5G. Our number of our lines including with internal filter lines, which are going to be needed in very large volumes, we are sold out. And we're looking now to be able to expand our capacity quickly to satisfy them.And then finally, you're looking beyond '20, we're going to use this time period where other people may seem more uncertainty. And we're going to position our portfolio and Giovanni alluded to it earlier, you'll see us spending more time developing more software and better products to be able to satisfy the evolving needs of our customers including, for [OCDUR] subsystems, for ROADM subsystems and for all optical cross-connect systems. So, this is a great, great and exciting moment for us, Paul.

Our next question comes from Richard Shannon with Craig-Hallum. Your line is now open.

Maybe I'll add to the topic of silicon carbide here. I think if I cut your numbers right from prepared remarks, silicon carbide grew roughly 50% last year. When you can give us a sense of what your expectations are for growth there or maybe couch it in terms of what your capacity will enable? And also if you can talk about the current position or mix of silicon carbide that's 6-inch and where they could go next year?

So, with respect to [indiscernible], I think first of all, we would expect to continue to see silicon carbide continuing to grow, whether it's exactly a 50. I'm not sure I can say, but we certainly expected to be amongst the elevated growth rates. We say, north of 30-ish, keep going. I'm not saying at 30, I'm just saying that, if we expect it to be among the accelerated growers. And if you think about Giovanni's remarks that, we have doubled the capacity, three times in five years.We don't tend as a company to put out press releases when we do capacity expansions. We just sort of get along with doing it, but also capacity expansions happens in a lot of different ways, not just the addition of the machines. So consequently, I would expect us for a good long time here to be having a significant part of the CapEx dedicated to silicon carbide. As we've said before, we now see demand in RF and power particularly for electronic vehicles, but our view as a company, I think as you know is that. We do not expect the demand for power use of silicon carbide to be just limited to electric vehicles over the course of time. Go ahead, Chuck.

Richard, I would just add -- add that, we think that yielded throughput, large increases in yield and throughput need to accelerate. As we look out, this is such a big market place that we're underpinning. As we look out over the next 3 to 5 or even 5 to 10 years, the marketplace is awfully inadequate with supply capability of high-quality silicon carbide substrates as the electric vehicle market penetrates deeper and deeper into the traditional internal combustion engine market. The world is going to need a lot more capacity than what it has and we're intending to add more capacity to keep pace with our objectives, which is that this business will do one of the growth engines for II-VI for a long time to come.

Okay great, second question on CapEx. Can you give us a sense of what you are thinking for fiscal 20? Is there any number or can it relative what you just spend for 19?

Well, I think first of all generally speaking, it probably in the neighborhood or less that we have this year. We obviously had some two or three years of very elevated CapEx, and I will just remind everyone that back in 2012 when our revenue was about $550 million, our CapEx was $50 million. So, CapEx for our company tends to run about 10% of the revenue even now I know people look at our number now for us more than 100 million and think that’s still kind of elevated. I think you want to think about that as speaking about 10% of the revenue. So, I suspect that it may be at this level and some barge around plus or minus $10 million probably.

I think at this point, I know we have a lot of other calls of other companies scheduled today. We are at 10 o clock. I think we probably should move to close. We really want to thank all of you who are with us today and thank you for all of your questions.We look forward to updating you on the results of our first quarter call, first quarter of fiscal year 20, in the early part of November. Thank you so much for joining and we will talk to you soon. Bye, bye

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