Good morning and welcome to IPG Photonics Fourth Quarter and Year-End 2016 Financial Results Conference Call. Today's call is being recorded and webcast. There will be an opportunity for questions at the end of the call. At this time, I would like to turn the call over to Mr. Angelo Lopresti, IPG's Senior Vice President, General Counsel and Secretary for introduction. Please go ahead, sir.

Thank you, and good morning, everyone. With us today is IPG Photonics' Chairman and Chief Executive Officer, Dr. Valentin Gapontsev; and Senior Vice President and Chief Financial Officer, Tim Mammen. Statements made during the course of this conference call that discuss management's or the company's intentions, expectations or predictions of the future are forward-looking statements. These forward-looking statements are subject to known and unknown risks and uncertainties that could cause the company's actual results to differ materially from those projected in such forward-looking statements. These risks and uncertainties include those detailed in IPG Photonics' Form 10-K for the year ended December 31, 2015, and other reports on file with the Securities and Exchange Commission. Copies of these filings may be obtained by visiting the Investors section of IPG's website, or by contacting the company directly. You may also find copies on the SEC's website. Any forward-looking statements made on this call are the company's expectations or predictions only as of today, February 14, 2017. The company assumes no obligation to publicly release any updates or revisions to any such statements. We will post these prepared remarks on our website following the completion of the call. I'll now turn the call over to Dr. Valentin Gapontsev.

Good morning, everyone. I'm pleased to report that IPG delivered another quarter of record results, capping off an excellent year. The fourth quarter of 2016 marks our 10th anniversary as public company. And as I reflect on our journey from the smaller company that IPG was 10 years ago to the $1 billion market leader we are today, I feel tremendous pride in all that our team has achieved. 10 years ago, IPG generated less than $150 million in revenue. At that time, we told you that our targets were 50%, 55% gross margin and 30%, 35% operating margin. Since then, our revenue has increased more than six-fold, and our gross and operating margins are at the top end and above our original ranges, respectively. More importantly, I am optimistic we can continue our strong financial performance over the next 10 years. Even to our current size, IPG has very significant opportunity to expand within our addressable market, as we continue to raise the bar in terms of the power, performance, and wide diversity of our products, which open a lot of new applications and unique niches for us. To highlight our progress in 2016, I will focus you on three key initiatives we discussed at last year's Investor Day, initiatives we believe will maximize long-term value for you, our shareholders. First, it's enhancing our leadership position within our core materials processing markets. Second, expanding into new products and applications. And three, generating industry-leading profit and cash flow. Let me start with our core markets. In 2016, we grew our industry leading market share of lasers within our core metal processing markets, winning new OEM accounts in cutting, welding, cladding, cleaning, drilling, additive manufacturing, and other applications. Our biggest growth driver in 2016 was within high output power lasers. We…

Thank you, Valentin. Good morning, everyone. Fourth quarter revenue grew 25% to a record $280.1 million from $223.6 million a year ago. Materials processing sales increased 24% year-over-year to $258.6 million, accounting for approximately 92% of total sales during the quarter. This growth was primarily driven by higher demand for IPG's core cutting sales. Sales for welding applications increased slightly, and sales for marking and engraving applications slightly decreased. Although on a smaller base of revenue, we saw solid growth from other materials processing applications including ablation, drilling, cladding, and cleaning and stripping. Sales to other markets, including advanced applications, telecom and medical, which accounted for approximately 8% of IPG's total revenue, were up 48% year-over-year to $21.6 million. Strong sales in telecom, driven by our recent our acquisition of Menara Networks, as well as robust organic growth, was offset by lower sales of advanced applications in medical. Menara generated $5.4 million in revenue during the quarter. High-power laser sales, which accounted for 59% of total revenue, increased 35% year-over-year to a record $166 million. This growth was driven by continued strength in cutting applications and, to a lesser extent, cladding and 3D printing, partially offset by a slight decline in welding sales in the quarter. Pulsed laser sales, which accounted for 10% of revenue, increased by 5% year-over-year to $29.3 million. We saw strong double-digit growth in our high-powered pulsed products driven by increased demand for marking and engraving using high-power pulse lasers, as well as ablation, cleaning and stripping, and photoresist patterning for flat panel display applications. Medium-power laser sales were flat year-over-year at $24.1 million, or 9% of total revenues. Higher demand for fine welding applications was offset by a decrease in demand for fine cutting applications. Sales of QCW lasers, which are mostly used for fine…

Thank you. At this time, we'll be conducting a question-and-answer session. To allow for as many questions as possible this morning, we request that you each ask one question and one follow-up, and invite you to rejoin the queue. Our first question comes from the line of Patrick Newton with Stifel. Please proceed with your question. Patrick Newton - Stifel, Nicolaus & Co., Inc.: Yeah, good morning, Valentin and Tim. Thank you for taking my questions. I guess, first one is just focusing on the annual guidance range of 10% to 14%. Can you help us understand what drives some of the deceleration in growth through the year? Clearly, the comps get tougher, but I'm trying to understand if there is greater FX headwinds baked into the second half of the year, if you're forecasting certain OEMs to vertically integrate, or if there are any other puts and takes embedded in that guidance?

So, the main things are the items that you called out, Patrick. So, the beginning of the year we started with, particularly with Q1, an easy comp compared to last year when the macro environments and conditions were pretty weak. So, you've got a substantial improvements in that this year with very strong growth forecast for the first quarter. We'd expect that to continue into the second quarter. The comps then become more challenging in the second half of the year. In addition to that, our visibility into the second half of the year right now is more limited. You'll remember that our shippable backlog extends out about three months. Our frame agreements give us visibility into about half of the year. But beyond that, we get our forecast from the OEMs, but the visibility into the shippable orders tend to be a bit weaker. So, it's a combination of the strong start of the year, and then the strong finish to last year that makes the comparison a bit more difficult in the second half of the year relative to growth. And then, the FX headwinds are baked in pretty evenly during the year. The FX headwinds in – they don't change a lot during the course of the year. We ran our budget with the exchange rates that I disclosed in the script and the ones that are in the news release. Patrick Newton - Stifel, Nicolaus & Co., Inc.: Great. And I guess the visibility on frame agreements and then shippable dovetails nicely into just a question on backlog data. The frame agreements were weak, but the firm shipments were very strong. You talked about receiving some orders in early January. So can you help us understand maybe the level that you received in January, so we can get a sense of the magnitude, given that total backlog was actually down year-to-year. And then, Tim, can you remind us on the frame agreements, are these tied to minimum purchase agreements with key customers or can you help us just define the difference between the frame and then the firm shipments?

So, the first thing is that we're very pleased to see that the firm shippable backlog was up at the end of the year. That reflected continued very strong order growth that we saw pick up in Q2 through Q3 and Q4. The strength of the order flow was probably amongst the strongest we've seen into the end of the year. The frame agreement – and then the shippable order backlog actually has continued to grow through January and the beginning of February with orders up more than 50% compared to a year ago. On the frame agreement side, it really was just the timing of when frame agreements are received. So, the total value of frame agreements received in January and the first week of February exceed $100 million. Patrick Newton - Stifel, Nicolaus & Co., Inc.: And then just reminding us on the difference – or frame is minimum purchase?

Sorry. So, frame agreements are not firm purchase commitments, which is why I always rely more on looking at the tone of the shippable backlog. They are indications of what the main OEMs think that they will buy during the course of the year, coupled with pricing that has been negotiated with them. We have historically always been flexible around the frame agreements, because we believe that it's extremely important to have a very good relationship with the customers. So we do not treat those frame agreements or take-or-pay agreements for a couple of reasons. First of all, if there is a significant change in the macro environment, we don't want to shove inventory down the customers' throat and force them into situations which may be detrimental to their own businesses. And secondly, we don't want to have a position where we're stuffing the channel with inventory in that regard. So we're pretty flexible in the way that we manage those frame agreements. If the macro environment continues to hold up, though, they are a good condition of overall demand that we expect during the year. Patrick Newton - Stifel, Nicolaus & Co., Inc.: Okay. Thank you for -

We get frame agreement so on and we do 50 frame agreement from December to January. But now the – combined with this, now is much higher than the same period compare a year ago – much, much higher. Patrick Newton - Stifel, Nicolaus & Co., Inc.: Great. So, if you're up 50% in January and February to-date, that would imply that you're up slightly if we took 2016 over 2015 and included the extra month and a half?

I didn't get that part of the question. Patrick Newton - Stifel, Nicolaus & Co., Inc.: I'm sorry. Total backlog I'm showing was $414 million versus $442 million. You're saying that January and February up 50% year-over-year to about $100 million, implying an additional $30 million or so. So, your total backlog...

Just the frame agreements was the number I was referencing and the total value of frame agreements that came in. I didn't give you a number on the total shippable orders that were booked. The shippable orders were up about 50% in January and the first week of February. Patrick Newton - Stifel, Nicolaus & Co., Inc.: Wonderful. Thank you for taking my questions. Good luck.

Thank you. Our next question comes from the line of Krish Sankar with Bank of America Merrill Lynch. Please proceed with your question.

Thanks for taking my question. I have two of them. Number one, Tim, on the full-year guidance, can you tell which regions looks like you're -

Krish, sorry, you're cutting in and out. The first part of that question was which regions are driving annual guidance?

That's right. The 10% to 14% growth, what regions are driving it? And then I had a follow-up.

So we continue to expect strong growth out of Asia, primarily China. Korea has got some momentum behind it, probably slightly weaker growth out of Japan, partly driven by the foreign currency headwinds there. We've got a strong forecast coming out of North America that's driven by both the materials processing, and within materials processing, we're starting to see some momentum around the systems business. We're, obviously, for the full year expecting an increase in the total telecom business, because you'll have a full year contribution from Menara, but also growth of the Menara business and the organic business that we had within IPG previously. In Europe, we've got – it's a bit more spotty there. So, in general, strong growth out of Italy, some of the main cutting OEMs, reasonable order demand out of European automotive, but no real acceleration yet there. I think European automotive is continuing to be affected by all of the factors that have affected the major companies there. And we're starting to see a bit of turn on the European macro. It's starting to look a bit stronger, but that hasn't driven a dramatic uptick in, say, the automotive investment there. We also have a reasonable growth rate coming out of our forecast from our Russian entity as well. So it's pretty much across the board, and I think that's reflected in the fact that Global PMI data is almost strong as it's been. It's near five-year highs. And you've got pretty good amount of liquidity available in China. It's another thing that I always watch. We haven't got a tightening situation in China around liquidity. That's something we'll continue to watch during the year, and good economic data in North America as well.

Got it. Got it. And then my follow-up question is on your largest customer, Han's Laser. Last year they made a big push towards making their own in-house laser, but it looks like they're still giving you orders and seems like they might be defocusing a little bit from making their own lasers. Can you just give us an update on what's going on there?

So, Han's continues to be one of our largest customers. The great thing about last year was that, as a percentage of total sales, they went down, but we continue to grow our China business. So, that reflected our strategy of diversifying that business, not just away from that main customer, but also across many different applications. We don't have a lot of information internally about where Han's stands in the development of a fiber laser technology, but we continue to be their major supplier for many of the core products. This year, I should think that Han's will probably have a stronger year for IPG, because they supply a lot of equipment to the consumer electronics area in China, and we're expecting that to have a bit of a tailwind in 2016. We don't have a lot more insight into that. We believe that they're making some lower power lasers. But, certainly, the progress they've made at the higher-power lasers is much less material.

Thanks, Tim.

In another five years, Han's would be able to make fiber lasers. It's only low power. They're making low power for nanosecond lasers, they start to make small quantities themselves only because the marking business is now in critical situation, stopped to bring any project at all, for all companies and Chinese company making marking system, now generate only including France. So, this business has become an absolutely must for future profitable.

Thank you. Our next question comes from the line of Joe Wittine with Longbow Research. Please proceed with your question.

Hi. Thank you. Congratulations on the impressive quarter. Tim, in your comments, you mentioned some ASP cuts. I'm curious if those were your kind of normal course of business, passing along costs to customers or if they were in response at all to competition. It seems like price aggression, especially among the start-ups, where there's been some consolidation, is picking up. That's my question. Thanks.

I didn't catch the beginning of your question. It cut out, Joe.

Yeah. First, I congratulate you on the quarter. And then, you mentioned ASP cuts in your prepared commentary on gross margin. So, the question was, were those your normal course of business price declines that you pass along to customers or were they in response to competition, and is the competitive landscape changing at all from where you sit?

Competitive landscape has pretty much stayed the same, so it's at the lower power levels. In terms of the ASP environment, it was not much more different from the usual. There was nothing that forced us to take pricing down by, say, 15% or 20%. Some of the – if you just looked to the analysis of average selling prices will actually have been related to the foreign currency depreciation during the year – sorry, during the quarter in China, and then the euro weakened in Europe, obviously. So, some of it was actually created by the foreign currency side of it. The others was normal course on products. And I'd say the competitive environment, there is a lot of chatter out there, but not much, if any, progress made by people in disrupting our performance. And I think that's best evidenced by the fact that we actually have called out several times we picked up several reasonable sized OEMs that were being sold product by our competitors over the last two or three years.

Yeah. In the UK, we'll compare in the optical power, our growth in other people if not – everybody far behind in rate of growth, nobody provide the same growth in optical power fiber laser as we demonstrate. So, our share in the market not decrease, but increase again.

Understood. Then as my follow-up, maybe just a financial modeling question. Could you help us understand how you expect the operating expenses to trend as a percentage of sales? 2016 was an investment year, as you would expect it to be. So, do you expect to return to delivering some semblance of op leverage this year, or will the aircraft investment in kind of carryforward of last year's full run rates result in some dis-leverage as you go?

So, starting at the top of the income statement, we are internally targeting being within the upper half of the gross margin range, as we were last year. On the operating expense side, I'd model operating expenses on average for the year at about $50 million, with OpEx in the range of 17% to 19% – I mean, 19% is right at the top end of the range of where we've been. So, again, we come back to this viewpoint that you can have exceptional quarters where growth is very strong and you get to an underlying OpEx that is in the 37% range, 38% range. That I think is the top where we are. We view the model that we have with gross margins in the upper half of the 50% to 55% and operating margins in, let's say, a range of – we're going to put a range out there of 32% to 37%, we've always been above that, and towards the top of that is being a stellar business model. We don't think you've got an opportunity to sustainably drive OpEx up into the 38%, 39%, because we think that we forego opportunities to develop the business by developing new product, by spending on R&D, by investing in sales and marketing, in new geographies and salespeople who are specialists covering the new product introductions we've got. So, we believe that it's important to invest in the business to drive that growth.

Excellent. Thank you.

Thank you. Our next question comes from the line of Joe Maxa with Dougherty & Company. Please proceed with your question. Joe Maxa - Dougherty & Co. LLC: Thank you. Following on that line of thought with the gross margins, I mean, you've been in the upper half for many years now of your targeted range. What would need to happen to be at that – really get down to the mid range or even lower?

So, the mid range and lower really is out there to take account of, if you have very weak quarters of demand and you can't recover your manufacturing cost adequately during a short timeframe, you would likely end up in the bottom half of that range. So, it has to be discussed as a possibility. Outside of that, if you started to really pursue significant opportunities – we've talked about this, like if you could layer in significant – and I talk here of a couple of hundred million dollars, say, of welding revenue by displacing an incumbent welding technology. And in order to get to that kind of revenue, you're needed to take the pricing of our technology down to compete with the incumbent technologies, that is something that might reduce the overall gross margin. But there are constantly puts and takes around that. Then you've got other newer product that comes in that would benefit you to offset some of that. The other major thing that might materialize reduced gross margin if we couldn't get our cost down further would be if there's some substantial dislocation in the pricing environment in the market. So, it's sort of partially driven by taking account of potential risks, all of which we've been able to offset to-date. Joe Maxa - Dougherty & Co. LLC: Okay. That's helpful. And then just one follow-up. I don't think we've talked about this in a couple of quarters, but on the advanced applications side, I'm thinking more on the laser weapons. Are you starting to see any traction there at all or are we still a few years away?

We continue to get meaningful orders that are still primarily targeted, we think, at the research and development side of that. Historically, 2017 was thought to be the year when some of that might accelerate. We don't have visibility into that. There are couple of meaningful orders that we're talking with people about, but they're more on the R&D side. So, nothing specific to give you in terms of information on that market at the moment. Joe Maxa - Dougherty & Co. LLC: Okay. Thank you.

Thank you. Our next question comes from the line of Bobby Burleson with Canaccord Genuity. Please proceed with your question.

Yeah, good morning. Congratulations.

Thank you, Bobby.

Thank you.

So, I was just curious, there's not a lot of visibility for the second half. But I was wondering in terms of your consumer electronics exposure, what the typical seasonality would be if we're at a strong CapEx cycle in China?

You'd have a strong Q2 and strong Q3 driven by that.

Okay. Great. So, potentially, maybe there's some conservatism there, given you don't have visibility at this point.

I think if you look at the annual guidance, the re-deceleration is the visibility into Q4. The way that we've modeled and budgeted our numbers, you continue to show you've, obviously, got very strong growth in Q1 and you'd have good growth in Q2 and Q3. It's the deceleration of an exceptionally strong Q4 that is out there rather than just – rather than the entire second half of the year.

Okay. And then...

It depends from political situation. It would be stable political situation and not some trade war between China and America and so on, then we see very good perspective where very sure we'll grow much – even much faster than we have forecast. But you forecast, some happen, some force majeure situation, everybody is – very sensitive for this would be then. If would be political situation stable, we don't see any – see very good quality this year, very – much better than was 2016.

Okay. Great. That's very helpful. Then, I guess my follow-up is just on the amplifiers and on the 3D printing. Just kind of curious relative to overall growth to the company, what kind of growth rates you're kind of expecting out of these businesses?

On the 3D printing side, I think we've got a growth rate that's slightly above the top of the guidance range. That growth rate has slowed down a bit. Last year, that business grew by, I think between 15% and 20%. And then on the amplifier side, overall, it would be above the top of the guidance range, because we've got a full year from Menara. If you strip that out, I think it's in the range of 10% to 15% as well on the – if you normalize the acquisition for the full year, it's in the range of 10% to 15%.

Thank you. Our next question comes from the line of Jim Ricchiuti of Needham & Company. Please proceed with your question. James Ricchiuti - Needham & Co. LLC: Thank you. Just looking at your guidance and particularly at the upper end of the annual range that you're talking about, can you give us some sense as to how much or what kind of contribution you might be assuming from some of the newer products and new market initiatives? Just trying to get a sense as to how those newer areas are comparing with the core IPG business.

So, the newer products that we've defined out there that include, for example, the QCW, the high-power pulse lasers, the green, the accessories last year were about 15% of total revenue. Last year, the QCW underperformed a bit. We've said that we expect to have strong performance from QCW, will have a strong performance, again, from the high-power pulse, the accessories, the systems area. So, you'd be getting to those product lines probably again at the upper end of that guidance range for growth. And then we've also built-in some moderate amounts of expected revenue from what I'd call the very new product, the RGB and some of the ultra-fast and UV.

Also, the medical laser is becoming now the [lone] process qualification FDA and so on. But we're going very successful with the way of revolutional product for this application is now recognized more and more, providers – medical provider. So, we consider it very fast growth on medical business. Our target to build only in medical many hundred million dollars in medical direction. With the new application, ultra-fast lasers now we have developed different line – three different families each for 5 to 10 different product, each of this family it's extremely – we have finished qualification many of them, so now we are very aggressively going this market. The way that we will win completely and we'll get very serious share in the market during the couple of years. It's also these other products which we developed are also going well, the same for projectors, RGB source for projectors. It's not only for cinema application, many other, very wide screen in industrial, in the financial area and so on. It's very big market and we only have market, it's very high. It takes some time for qualification, and so usual any new product need couple of years minimum, even more to penetrate in OEM business now at stage of qualification and so on, but it's really very big potential each of these application. Medical device market also we found $150 billion market. We found much rather than metal material products $150 billion. We try to install and penetrate this market. We have very good chance with – now start to work with the most biggest Tier 1 providers in this market. It's where we see very huge potential here, but that's like stents and so on. Our technology fit their requirement in full. James Ricchiuti - Needham & Co. LLC: That's helpful, Valentin. Thank you. My follow-up question just with respect to the booking strength you've seen thus far this year. You alluded to the likelihood that you might see a pick-up in the consumer electronics market. Are you seeing that in your bookings? And if you haven't seen it yet, would you assume that you'll see it over the next couple of months to see those kind of shipment levels increase Q2, Q3 into that market?

So we have started to see it particularly in the QCW product line, and potentially in some of the medium power lasers for sort of fine cutting and fine welding applications. So we've already started to take QCW orders for Q2 delivery that we believe are primarily the consumer electronic investment cycle that we're expecting.

Thank you. Our next question comes from the line of Jeremie Capron with CLSA. Please proceed with your question.

Thanks and good morning, gentlemen. And congratulations on a strong finish to the year. I wanted to ask you about the welding market. You mentioned some relative weakness in this particular application. If we step back and look at the big picture here, what do you expect in terms of laser welding adoption this year? We heard about European automotive companies postponing maybe some developments or deployments there last year. I wonder if you could comment on the overall welding market and the path towards laser welding adoption.

With the welding market, where people talking mainly about automotive, but automotive thin metal welding, thin metal welding, few only millimeters dealing with. If we are working for new application metal welding, steel laser technology, not steel penetrating, like thick metals, for example, while construction, bridges, like this and so pipelines, huge pipe market exists in laser welding still only starting penetration. We're talking from one side. It's for thick metal welding. Thick metal means from 10 millimeters up to 50, even 100 millimeters. It's absolutely still – not for laser, it's only starting penetration. And we develop here full complete solution, not to wait when the market will start to require – we now develop for them technology complete solution. It's much faster penetration than to wait when some integrators will get your way, they will start working, but not too many. Second, we are – in other side, it's micro welding similar application. It's also very big future for micro welding. So, from one side, it's very thick metal, second it's thin, very thin. It's not millimeter, but even micrometer thick, touch application for welding. And again, we develop here complete systems. We start to sell complete systems, only started this process only two years ago. This year I have mentioned we sold more than 100 systems. It's only start to qualification now. We hope soon it would be thousand systems, not just laser, where it's engine and system, but full complete system. It's our future.

Thanks very much. And a follow-up question on the tax reform. I think we all have in the back of our mind the looming tax reform. I'm trying to understand how it may affect your company. I understand you're a very large exporter out of the U.S., so if you could clarify your net export situation and maybe your thoughts around tax reform. Thanks.

So, first of all, any specific number I can give you is that about a third of our operating income is in the U.S. So a higher percentage of our operating income is in the U.S. than sales, because we produce a substantial quantity – well, all of the semiconductor diode chips, and a very high percentage of the packaging is also in the U.S. as well. So, all of that product does get exported to Germany, and into Russia for manufacturing finished goods. If you look at that one-third basis and you'd factored in a potential decrease in just the tax rate rather than getting into the exports/imports criteria that are being mooted out there, a 15% reduction in the tax rate would be a $15 million benefit to us and 20% reduction on the tax rate would be a $20 million benefit to us. Analyzing the export value and the import value becomes a lot more of a complex issue in Germany. And I think the one thing that people don't take into account is that, okay, the U.S. decides that they're going to tax-exempt exports, what's everybody else going to do, because those exports were an import somewhere else. And there's going to be a consequence to this. So, it's practically impossible to speculate around that what that is. The lowering of the tax rate is the main data point I would give you that would benefit IPG.

Thanks very much. Good luck.

Thank you.

Thank you. Ladies and gentlemen, our final question will come from the line of Tom Diffely with D.A. Davidson. Please proceed with your question. Thomas Robert Diffely - D.A. Davidson & Co.: Yeah. Good morning. So, a question on the high-powered cutting market. Obviously, very strong, drove a lot of growth this year, but it sounds like the trends for cutting and welding were opposite in China, your largest segment – or your largest region, where welding was much stronger than cutting. I'm curious if there's something to read into that or what drives the differences between the overall business and what you're seeing in China?

No. I think both was strong in China. We'd said, we had a strong cutting and strong welding sales for high power in China. You're maybe referencing from the beginning of the year where the high power cutting was weaker, but it certainly picked up very strongly into the second half of the year. I would say the welding was stronger in China and North America than it was in, for example, Japan and Europe. China was driven by similar dynamics to other – particularly to North America. Thomas Robert Diffely - D.A. Davidson & Co.: Okay, good.

There wasn't a fundamental difference on that. Thomas Robert Diffely - D.A. Davidson & Co.: Okay. And then as you look at over the next couple of years, do you think growth is still driven by the very successful cutting side or do you think welding grows as a higher percentage is because of your lower business there today?

We continue to believe that there's significant room for growth on the cutting side. As Valentin said, if you look at the total value – or amount of optical power that's being sold, the market does not appear to be anywhere – not anywhere, but close to saturation at this point. So I think the main driver on the cutting side – and this was referenced in a couple of surveys that we saw out there is that people are starting to expect an acceleration in the replacement of installed CO2 lasers. So that while fiber has already a high share of the annual demand, there are tens of thousands of installed CO2 cutting systems that have been bought over the last 10 or even 15 years that require replacement. So, that should not be discounted as an ongoing demand for our cutting business. On the welding side, clearly, referencing Valentin's comments, we do want to grow welding to be a greater part of our total sales. And over a multi-year time horizon, we'd expect welding to become a higher share. Thomas Robert Diffely - D.A. Davidson & Co.: Okay. Thank you.

Thank you.

It's also the welding module with high-power laser also welding with QCW laser growing extremely fast. It's the welding not big part, but with the QCW laser, we expect this year a huge growth in much higher than it was the last year. It's many thousands such systems in the market would be in – QCW laser is based on this system. Especially with China number one again in this direction, give this only two to three years we sold only maybe 100, 200 systems per – lasers per year. Now we are going for many thousand lasers only from China. It's not only Han's Laser. Han's Laser was number one laser to our QCW laser, now mainly the competitor for Han's also now tries to get this technology and to introduce in March their products.

Thank you. At this time, we have reached the end of our question-and-answer session. I will now turn the floor back to Dr. Gapontsev for any final remarks.

Thank you. Thank you for joining us again this morning. And, again, we look forward to speaking with you next quarter's call and to demonstrate again new record and much better results. Have a great day.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.