MKS Inc. (MKSI) Q4 2022 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the MKS Instruments Fourth Quarter and Full Year 2022 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. And I would now like to hand the conference over to your speaker today, Mr. David Ryzhik. Mr. Ryzhik, please go ahead.

Good morning, everyone. I am David Ryzhik, Vice President of Investor Relations, and I'm joined this morning by John Lee, President and Chief Executive Officer; and Seth Bagshaw, Executive Vice President and Chief Financial Officer. Yesterday, after market close, we released our financial results for the fourth quarter and full year 2022, which are posted to our investor website at investor.mks.com. As a reminder, various remarks about future expectations, plans and prospects for MKS comprise forward-looking statements. Actual results may differ materially as a result of various important factors, including those discussed in yesterday's press release and in our quarterly report on Form 10-Q for the quarter ended September 30, 2022. These statements represent the company's expectations only as of today and should not be relied upon as representing the company's estimates or views as of any date subsequent to today, and the company disclaims any obligation to update these statements. During the call, we will be discussing various financial measures. Unless otherwise noted, all references to combined company financial measures reflect the combined results of MKS and Atotech Limited, which MKS acquired on August 17, 2022. Also, unless otherwise noted, all income statement-related financial measures will be non-GAAP other than revenue. Please refer to our press release and the presentation materials posted to the Investor Relations section of our website for information regarding our combined company results, non-GAAP financial results and a reconciliation of our GAAP and non-GAAP financial measures. As a reminder, in the fourth quarter, MKS updated its end market classifications, including replacing advanced electronics with electronics and packaging, reclassifying products and services supporting light emitting diodes, laser diode and solar markets from electronics and packaging to specialty industrial and reclassifying Material Solutions division products and services supporting wafer-level packaging from semiconductor to electronics and packaging. For a detailed breakout of reported revenues by end market as well as Atotech and combined company revenues by end market, please visit the Investor Relations section of our website. Now I'll turn the call over to John.

Thanks, David. Good morning, everyone, and thanks for joining us today. We ended 2022 on a strong note with revenue and EPS exceeding the high end of our guidance range. Of course, the first quarter did not begin the way we expected. On February 3, we identified the MKS have been a victim of a ransomware incident. We took immediate action to contain the incident, which has materially impacted our business systems as well as the operations of our Photonics Solutions division and Vacuum Solutions division, including our ability to process orders, ship products and provide service to customers. The operations of our Materials Solutions division were not impacted. Today, we are well into the recovery phase. And we've begun starting up the effective manufacturing and service operations, and we expect these operations will be restored over the coming weeks. We plan to provide a more complete picture of the costs and related impacts of the incident. On our first quarter earnings call, well we do expect there will be a material impact on our first quarter performance. Our main focus today, of course, is on ramping up our production and service operations to meet the needs of our customers. I do want to take a moment to reflect on how enormously grateful I am for the efforts of the entire MKS team through leadership from all key functional departments in responding to and managing the situation. You always hear that the best proven metal in the toughest moments, but you often don't get to see that. I'm extremely proud of the unprecedented responsiveness, stamina, innovation and resiliency demonstrated by our teams. I also want to thank our customers, suppliers and other business partners for their understanding, patience and support through this difficult period. We're working hard to be fully back up soon, and I look forward to delivering on our commitments to all of you. Now on to the business. I start by reflecting on the major milestone of 2022, which, of course, is the addition of Atotech to the MKS portfolio. Atotech's critical process chemistry and equipment solutions across our electronics and packaging and specialty industrial markets further strengthened our position as a foundational technology solutions provider. We've hit the ground running with Atotech. Our integration efforts have been progressing extremely well, and our initial engagements with major PCB manufacturing customers have been very positive. We look forward to demonstrating the value of our company's broader and unique capabilities to all of our stakeholders. 2022 also marked another record year for our semiconductor business, highlighted by strong demand across our vacuum and photonics portfolios. Our customers count on our broad domain and process expertise to solve their most complex challenges. We are uniquely positioned in the semiconductor capital equipment industry as MKS solutions are used in over 85% of the steps needed to manufacture a semiconductor chip. Operationally, during 2022, our global team navigated well through continued supply chain constraints and significant inflationary pressures. I'm proud of how we executed to meet those challenges while remaining focused on innovating across our portfolio to solve the industry's critical technology challenges. While we believe macroeconomic challenges along with expected pressures and WFE investment will persist this year. Our 2022 achievements, combined with our leadership across a broad array of end markets should significantly enhance our long-term potential to deliver sustainable and profitable growth within an estimated $25 billion addressable market. Now let me discuss our results in more detail. We delivered fourth quarter revenue of $1.09 billion, adjusted EBITDA of $282 million and net earnings per diluted share of $2. Sales to our semicon market exceeded our expectations as we executed well in responding to supply chain constraints and delivered on shipments better than anticipated. Our Photonics Solutions revenue set another record reflecting continued customer traction and market penetration in advanced lithography, metrology and inspection applications. We were pleased to see our Optical Solutions business continue to gain traction across the EUV ecosystem for both lithography and inspection applications with OXY metrology and inspection applications continue to grow as a percentage of our overall semiconductor revenue and for 2022, our revenue from these applications grew almost 30%, outpacing estimated industry growth rates. We expect this will remain an area of growth and investment for MKS. Now moving to our electronics and packaging market. Revenue was in line with our expectations of a sequential decline when compared to combined company results for the third quarter. As anticipated, softening in global electronics demand impacted sales of our chemistry solutions for advanced PCBs and package substrate applications. Sales of our flexible PCB laser drilling equipment remained muted in this quarter as expected, as customers continue to digest the strong growth in flex capacity added in 2020 and 2021. However, we saw encouraging signs of customer activity in our HDI PCB via drilling business. In the fourth quarter, we received a meaningful order for our GEO HDI tool. And we are starting off the year well with a multiunit order in the first quarter from a long-time Atotech customer. This is the first example, highlighting the potential cross-selling synergies as we further integrate our businesses. For the full year, sales to our electronics and packaging market from the Atotech business grew by 3% when excluding the impact of foreign exchange and palladium pass-through. Overall, we're very pleased with Atotech's performance in a difficult near-term electronic device market. Turning to our specialty industrial market. Revenue was also consistent with our expectations and flat sequentially. The compared to combined company results for the third quarter. Our general metal finishing business continued to be impacted by lower automobile production volumes due to lingering supply chain constraints. In addition, some of our GMF customers were negatively impacted by disruptions associated with COVID-19 in China in the fourth quarter. That said, when excluding the impact of foreign exchange and palladium pass-through, Atotech's GMS business grew 2% year-over-year in the fourth quarter and 4% for the full year. Looking ahead to the first quarter of 2023 because of the impact of the ransomware incident, we're not able to provide our usual guidance at this time, but Seth will provide some color shortly. In summary, our fourth quarter results highlight our solid execution in a challenging environment. 2023 kicked off with its own challenges as the ransomware incident has demonstrated. It also presents opportunity. As we execute on our recovery efforts, we will remain focused on our growth strategy across our end markets, which includes attractive revenue synergy opportunities. These markets feature powerful secular growth drivers. And as near-term industry headwinds abate, we look forward to capturing the valuable opportunities of live heads. Now I'd like to turn the call over to Seth.

Thank you, John. I'll cover our fourth quarter and full year results and provide some thoughts for our first quarter of 2023, including eliminate impact of the ransomware incident. Starting with the fourth quarter, we did revenue of $1.09 billion, above the high end of our guidance range. Revenue was down $0.05 sequentially and down 6% year-over-year each compared to combined company results for the previous period. Excluding the impact of foreign exchange fluctuations in palladium pass-through, fourth quarter revenue grew 1% on a year-over-year basis compared to combined company results. Turning to our end market results. Fourth quarter semiconductor revenue was $503 million, declining 6% sequentially and growing 2% year-over-year each compared to combined comps result for the previous period, which was better than our expectations. Despite headwinds from continued supply chain constraints as well as newly enacted U.S. export restrictions in the fourth quarter, our team executed very well in delivering to our customers. Fourth quarter revenue from electronics and packaging market was $266 million, a decrease of 8% sequentially and 19% year-over-year each compared to combined company results for the previous period. Excluding the impact of foreign exchange, inflation pass-through, fourth quarter revenue declined 11% on a year-over-year basis compared to combined company results. On a sequential basis, this decrease in revenue is primarily a function of lower chemistry revenue resulting from the softer global electronics demand. Electronics and packaging revenue, we have 25% of overall revenue in the fourth quarter. As we mentioned in our recent Analyst Day, we have a unique opportunity to combine our capabilities to optimize the interconnect as package substrates advance PCBs require greater integration due to trends in miniaturization and complexity. We are very pleased with the initial reaction in the marketplace our combined laser drilling and chemistry capabilities. That reaffirms our belief that we can deliver meaningful revenue synergies from the combination of our 2 companies as customers begin to focus on next-generation device design cycles. Moving to our specialty industrial market. Revenue in the fourth quarter was $316 million flat sequentially and declining 4% year-over-year, each compared to combined company results in the previous period. Excluding the impact of foreign exchange in palladium pass-through, fourth quarter revenue grew 3% year-over-year on a combined company basis. In the quarter, the specialty industrial market made up 29% of total revenue. As a reminder, our specialty industrial market utilizes our proprietary technologies in vacuum, photonics, in materials to serve a broad array of applications. This share of expertise allows us to tap into some attractive secular growth opportunities, diversifies our revenue in case of healthy margins and cash flow. In the fourth quarter, consumables and service revenue across the 3 end market categories comprised 37% of our total revenue, up 3% year-over-year on a combined company basis, excluding the impact of foreign exchange in palladium pass-through. Looking forward, we expect this revenue stream to provide greater resilience in our financial model as we enter a period of cyclical and macroeconomic softness. Our services revenue, in particular, showed strong momentum led by our semiconductor market. These results are a bipart of the actions we took several years ago, strategically reorganizing services to drive a more market-centric growth and profitability strategy. Turning to our margins. We reported fourth quarter gross margin of 45.9%, exceeding the high end of our guidance range. We did well in addressing continued supply chain constraints, a inflationary pressures and also benefited from a more favorable product mix. Fourth quarter operating expenses were $242 million, up slightly from the midpoint of our guidance due to higher revenue volume. Fourth quarter operating margin was 23.6%, significantly above the high end of our guidance range due to strong operating leverage in our financial model along with favorable product mix. Our integration of Atotech is progressing well, and we are on track to achieve our cost synergy target of $55 million within 18 to 36 months post close. Fourth quarter adjusted EBITDA was $282 million, also above our guidance range. Just EBITDA margin was 26%. Net interest expense for the fourth quarter was $75 million. This is slightly lower than we anticipated with favorable timing of Fed rate increases relative to interest reset dates of our term loans as well as higher interest income. Our tax rate for the fourth quarter was 20% better than expected due primarily to refinement of acquisition-related valuations estimates in a favorable geographical mix of income. Net earnings for the fourth quarter were $133 million or $2 per diluted share. Turning to our balance sheet and cash flow. Consistent with our track record of deleveraging, we made a voluntary principal payment of $100 million in the fourth quarter. Exiting the quarter maintained strong liquidity with cash and short-term investments of $910 million and revolving credit facility of $500 million. We exited the quarter with gross debt of $5.1 billion, which included the voluntary debt prepayment, partially offset by a revaluation of euro-denominated debt due to a strong euro in the quarter. Our net leverage ratio exiting the fourth quarter has been calculated on a combined company basis was 3.4x based on trailing 12-month adjusted EBITDA. For the fourth quarter, operating cash flow was $184 million, and free cash flow was $130 million. Our capital expenditures in the fourth quarter were $54 million, an increase of $28 million compared to the third quarter, reflecting a full quarter contribution from Atotech. It is with prior quarters, we had a dividend payment of $15 million or $0.22 per share. Moving to full year 2020 results, revenue was a record $3.5 billion, up 20% year-over-year with $2.9 billion we reported in 2021. On a combined company basis with Atotech, revenue was consistent year-over-year. However, through the impact of foreign exchange inflation pass-through, 2022 revenue grew 5% for the combined company. Semiconductor revenue set another record in 2022, totaling $2.04 billion, growing 12% year-over-year. Through the impact of foreign exchange. Semiconductor revenue grew 16% year-over-year. We delivered strong growth across our portfolio of vacuum and photonic solutions, reflecting our unique breadth and technology leadership. [indiscernible] packaging revenue was $1.1 billion in 2022 on a combined company basis. Excluding the impact of foreign exchange, palladium pass-through, combined company sales declined 8% on a year-over-year basis. Atotech's business performed well in electronics and packaging market, growing 3% year-over-year, including foreign exchange inflation pass-through. Specialty Industrial revenue was $1.3 billion in 2022 on a combined company basis, excluding the impact of foreign exchange palladium pass-through, combined company sales grew 4% on a year-over-year basis. In 2022, on a combined company basis, the revenue split between our semiconductor Lutron packaging, especially industrial markets was 46%, 25% and 29%, respectively. Total consumables and service revenue amounted to $1.7 billion in 2022 on a combined company basis, up 5% year-over-year from the effect of foreign exchange in palladium pass-through. For 2022, on a reported basis, operating cash flow was $529 million and free cash flow was $365 million. I'll now turn to our first quarter outlook. John addressed the current SaaS recovery from the ransomware incident. Given that our effective operations are just starting to return to production and our focus on serving our customers, we are not able to provide our usual guidance for the first quarter. In addition, as you may have seen yesterday, we filed a verification with the SEC of an extension to file our 10-K. Given that we're in the process of restoring our systems, we require additional time to complete our annual report. As John noted, the incident has materially impacted our operations for our Vacuum and Proton Solutions divisions. The operations of our Materials Solutions division were not impacted. MSD revenues are spread across electronics and packaging and specialty industrial markets. What we can share is that prior to Ransomware event, we are planning to guide total MKS revenue for the first quarter to be approximately $1 billion. This reflected widely publicized cycle softness in the semiconductor industry, offset somewhat by a strong backlog coming into the quarter, continued weakening in global electronics spending impacted our electronics and packaging market and a modest sequential decline in revenue, especially industrial market. We estimate the Ransomware incident will impact our forest quote revenue by at least $200 million. However, we expect to substantially recover this revenue by the end of the second quarter. Price the incident, we're also expecting gross margins of 44.5% down from the fourth quarter levels due to lower volume and mix. In terms of operating expenses, we're also expecting approximately $260 million in the first quarter, up from fourth quarter levels primarily due to seasonal increase in compensation and fringe expenses as well as continued investment into product development and customer-facing sales and marketing expenses. Our ability to continue to invest in critical initiatives has been a key strategic driver behind our long-standing ability to exit cycle in a stronger market position to continue to accelerate our customers' product road maps. We plan to maintain its investments. We're also keeping a close eye on macroeconomic and industry trends and our proven playbook for managing costs for cycles allow us to adjust spending levels when and if needed. As an example, we've already executed approximately 1/3 of our $55 million ad tech cost synergy target within just a short period of time. Just to run our expectations prior to into the first quarter, we expect our tax rate to be 27%. We currently expect our net interest expense to be $78 million. With that, I'll turn it back to John to wrap up.

Thanks, Seth. While the events of the last month have been an unpleasant distraction, they do not change the MKS story. Following an important 2022, which we closed our strategic acquisition of Atotech and delivered strong financial performance. MKS is even better positioned for the future. We now address all of the core building blocks of advanced electronic devices from the semiconductor chip, to wafer level packaging to the package substrate to the PCB with enabling technologies that solve for miniaturization, complexity and novel chemistry. And we do so with an enhanced business profile featuring the most comprehensive technology portfolio in the industry, spanning vacuum, photonics and chemistry, market leadership in 20 critical product categories across a balanced end market profile, a resilient business model with a significant mix of consumable and services revenue and a larger addressable market. For all of these reasons, we are confident that we are ready to capture a broader set of exciting market opportunities. Now I'd like to turn the call back to the operator for Q&A.

[Operator Instructions] Our first question will come from Jim Ricchiuti of Needham & Company.

So if we look beyond the ransomware incident and you seem to be suggesting you think you could pick up a significant amount of that revenue impact in Q2. I'm wondering how we might think about some of the other metrics that you outlined in the Q1 guide prior to the incident. In other words, should we think in terms of those kind of expense levels and margins. And again, I'm not looking for guidance for Q2, but you've offered up this slide. I'm just wondering as we think beyond this into the June quarter, how we might think about some of these other metrics other than interest expense, which you have given some color on.

Yes. Thanks, Jim. This is Seth. I'll answer your question. Yes, I think you'll -- in our view, we gave a little snapshot of the Q2 expected guidance prior to the incident. And so we gave you a metric for how to think of the business going forward. Obviously, we've got a much different platform in terms of more resilient revenue stream from unit-based chemistry and service revenue. We've got many opportunities to grow the business in other multiple markets. And we'll continue to invest in the areas that really drive product investment as well as customer-facing opportunities, like of sales and marketing. So we have a lot of opportunities we want to invest in. And our goal is to exit any cycle, strong worth that we enter that cycle. So really no change in the business. As John mentioned, this is kind of a -- that's what Q1 speed month for us is very important. We continue to get our customers up from operation side, local service side as well. But we're really focused on, again, growing the business in the long term, making those investments.

Okay. My follow-up question just relates to your specialty industrial business. If I heard you correctly, you're talking about a modest, I think, sequential decline. And I'm wondering is that -- we don't have a lot of experience with that part of the business. Is that seasonal? Or is that macro related?

Jim, it's John. I'll take that. There is a little bit of seasonality to the automotive industry, but really it's end demand driven. And I think if you read about supply chain constraints in automotive, you can see that the first half, lease expectations are that it's a little weaker in automotive and perhaps later. Of course, we don't know what will happen later. But really, that's really what's driving most of that.

[Operator Instructions] Our next question will come from Sidney Ho of Deutsche Bank.

I want to start off with the ransom way events. You talked about at least $200 million of revenue impact in the first quarter, and most of that will be recovered by the end of second quarter. If you double-click on that, is that mostly impacting the semi business versus your other segments? And the other part of the question is, do you think any of the revenue is perishable, whether it's potentially losing share to a competitor? Or that's an opportunity for your customer to cancel order based on what's going on in the broader market?

In, thanks for the question. It's John. I would say that a lot of the revenue is, of course, semi based. And that's why, as you know, in the industry, these critical subsystems that we make are co-design with our customers, qualified by their customers. And so really difficult to displace. And we've had relationships with these customers for decades, and they've been very supportive. So we feel that all this revenue is easily recovered in terms of designs. I think that there are other revenue that could be lost a little bit, but those are very de minimis. And we're really not worried about that, and we're going to try to get those back as well.

Okay. That's helpful. My follow-up question is, if I look at the first quarter, you gave some color on -- in the pre-ransomware events, what you've guided $1 billion, down 8%, you give a little comment on semi versus electronics packaging and especially Industrials. Just on an order basis, do you expect first quarter to be the trough for any of these businesses. Maybe you can comment on the kind of backlog or what you're seeing into second quarter Well, that would be great.

Yes, Sandy. So we don't really comment on order rates, but I think that you can surmise that because we would have guided $1 billion, the strength of the backlog is really carrying that, especially for the semiconductor industry, as you mentioned. And so we're really happy with the strength of our backlog that we would have done much better. As I said before, whatever gets lost in Q1 because of the ransomware event we expect substantially will be made up by Q2.

[Operator Instructions] Our next question will come from Krish Sankar of Cowen and Company.

Drove them to first one, John, back to the prior question about pre-runs I would have guided $1 billion, thanks to the backlog. Is it fair to assume if you try to look at the linearity through the year, your revenue should eventually follow the WFE pattern. In other words, your customers are knowing their inventory in theory, semi should start slowing free progress through after Q1 pre ransomware. Is that a fair assumption?

Yes, Chris, I think that's a fair assumption, but I would point out, though, that because we're exposed to 85% of WFE, as you well know, you covered these companies, not all of them are behaving the same way. Some customers of ours in wafer fab equipment are saying they're going to go down in Q1 and -- or first half and some have different rates at which they're going to go down. Some are saying, no, it's still pretty steady in the first half. And some of the saying is going up. for the whole year even. So we're exposed to all those customers. So in general, you're right, if WFE goes down, we'll go down. Our long-term model has obviously demonstrated that we can outperform WFE by 200 basis points. But we're a much broader company now, and we're exposed to different parts of WFE. And so I think that just allows us to be a lot stronger supplier to the ecosystem.

Got it. And then a follow-up for Seth. You said just curious with this random impact on your revenue. How does that affect your term loan covenants?

Yes. As we talked about in the exit in the fourth quarter, our net leverage ratio was 3.4, gives a lot of headroom relative to a 5.25 leverage covenant ratio, which is on the term loan A only, by the way, which is where we paid off the $100 million in the fourth quarter. So that covers only tied to term loan A. That's $90 million exiting Q4. And looking ahead, we see headroom going forward as well. So that's an area we feel very comfortable with, quite honestly. That revenue moving from Q1, we believe entity recover in Q2 will kind of offset that on a 6-month basis. So we feel very comfortable with covenants going forward. But we'll kind of lean into that term loan A as well. It's kind of where we're going to kind of delever more aggressively. And I just want to come back to one comment I had before early on, as I responded to Jim Ricchiuti call, I meant to refer Q1 pre-ransomware information relative to Q2. So I just want to kind of clarify that point as well.

Our next question will come from Joe Quatrochi of Wells Fargo.

I wanted to understand the gross margin guidance or commentary for 1Q. Maybe if you could unpack that a little bit in terms of just like the moving parts there? Because I would have thought that, I guess, maybe it could have been a little bit better than that given Material Solutions should be a higher percentage of the total company revenue. And I believe that has a higher kind of corporate average gross margin. If you could just help us out there.

Yes, Joe, I'll take this, it's Seth. So in the fourth quarter, we talked about a little favorable impact favorable on the mix for the quarter. That's why we're above the high end of the guidance range. And then in the Q1 commentary, $1 billion, most of the impact on the margin is really volume-driven with a slight mix differential there as well. You're absolutely right on the MSD side, those margins a little bit higher than our corporate average. But fundamentally, that $1 billion commentary has quite a bit of revenue in the Photonics Solutions division as well as with the vacuum solution division as well. So really, the Q1 commentary is primarily volume driven, a little bit more normalized mix.

Got it. And then just -- is there any sort of like cash outlay related to the ransomware attack that we should be aware of, I guess, when you think about that kind of back to your estimating the net leverage?

Yes, Joe, I appreciate the question, but we're really not going to provide any details on the ransomware investigation. Certainly, we are hiring experts to help us recover and those are expenses. But in terms of cash outlay, I think there's really no comment here.

Next question will come from Mark Miller of the Benchmark Company.

I just was wondering between the ransomware issue and also the expected macro slowdown, can you discuss how the back -- what happened with the backlog last quarter? And -- are -- does the backlog indicate it's going to be a front end, back end or basically an even year in terms of sales?

Yes, Mark, it's John. I would say that, as I said earlier, the guidance we would have given prior to the ransomware of $1 billion, a lot of that is on the strength of the backlog that we have entering Q1. And so we can't really predict what will happen after that for sure. But certainly, the strength of the backlog allows us to probably we probably would have outperformed many of our peers in Q1 if the ransomware event hadn't happened.

And the margin profile, what's in the backlog, is that similar to what you've been seeing recently?

Yes, I think there's no change there, Mark. Same kind of customers. So no real change there on the margin profile for.

Our next question will come from Steve Barger of KeyBanc Capital Markets.

You mentioned the 4Q Geode order, and I think a separate multiunit order. Can you talk about pipeline visibility into further orders from legacy ATC customers?

Yes, Steve. I would say we were -- we talked about the 4Q order. That was a multiunit order. That was -- that was not with Atotech's extra synergy, if you will. There was another order, which we did call out in Q1, which was a long-time Atotech customer that we really didn't have a relationship with. So that was clearly a synergy. That happened a lot sooner than I was expecting, Steve, so I'll take it for sure. But we have a long pipeline that's reviewed with me every month of other potential synergy opportunities going both ways, areas where ESB could help Atotech and vice versa. And these are -- you got to look at these as multiyear efforts. You talk to the customer, you get qualified, then they ramp -- and that's the kind of time frame that you should think about. And every one while you get a bluebird like we talked about in the call.

Got it. And can you talk about how ATC's recurring revenue stream performed during the quarter versus your model? And is that revenue stream running as expected to start the year?

Yes, it is. As Seth talked about, excluding FX and palladium like everybody else in the industry, we are really pleased with how they did relative to the industry. We believe we maintain share in electronics and GMF. And so that's really met our expectations, and we're really pleased with how Atotech is performing.

Thank you. And that will conclude the Q&A portion of the conference. I would now like to turn the conference back to David Ryzhik for closing remarks.

All right. Thank you for joining us today and for your interest in MKS. Operator, you may close the call, please.

This will conclude today's conference call. Thank you all for participating. You may now disconnect, and have a pleasant day.