Impinj, Inc. (PI) Q1 2021 Earnings Report, Transcript and Summary

Good day, everyone and welcome to the Impinj First Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note, today’s event is being recorded. At this time, I’d like to turn the conference over to Ms. Ellen Hayes-Roth, Investor Relations. Ma’am, please go ahead.

Thank you, operator. Good afternoon and thank you all for joining us to discuss Impinj’s first quarter 2021 results. On today’s call, Chris Diorio, Impinj’s Co-Founder and CEO, will provide a brief overview of our market opportunity and performance. Cary Baker, Impinj’s CFO, will follow with a detailed review of our first quarter 2021 financial results and second quarter 2021 outlook. We will then open the call for questions. Jeff Dossett, Impinj’s CRO, is also on the call and will join Chris and Cary in the Q&A session. Management’s prepared remarks, along with the trended financial data, are available on the Investor Relations section of the company’s website. Please note that we will make certain statements during this call that are not historical facts, including those regarding our plans, objectives or expected performance; the expected or potential impact of COVID-19 on our business, operating results, financial condition or prospects; the expected or potential responses of government authorities, customers, partners and the company to COVID-19; and the availability, production and adoption of our products. To the extent we make such statements, they are forward-looking within the meaning of the Private Securities Litigation Reform Act from 1995. Any such forward-looking statements represent our outlook only as of the date of this conference call. While we believe any forward-looking statements we make, including concerning COVID-19, are reasonable, our actual results could differ materially because any statements based on current expectations are subject to risks and uncertainties. Please see the risk factors in the annual and quarterly reports we file with the SEC for more information about these risks. We do not undertake, and expressly disclaim, any obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise except as required by applicable law. During today’s call, all financial numbers we discuss, except for revenue, or where we explicitly state otherwise, are non-GAAP financial measures. Balance sheet and cash flow metrics are on a GAAP basis. Free cash flow is a non-GAAP measure. Before turning to our results and outlook, please note that the company will participate in the Oppenheimer 6th Annual Emerging Growth Conference on May 11, and the 16th Annual Needham Virtual Technology and Media Conference on May 19 and Baird’s 2021 Global Consumer, Technology and Services Conference on June 9. We look forward to connecting with many of you at these events. I will now turn the call to Chris Diorio, Impinj’s Co-Founder and CEO. Chris?

Thank you, Ellen. And thank you all for joining the call. Our first quarter results were strong, with revenue and profitability exceeding our guidance. Already strong fourth quarter 2020 bookings became even stronger in first quarter 2021, setting another quarterly record. High demand, record bookings and terrific progress on our retail loss-prevention engine highlight underlying strength in the business. But even as those bookings grow, limited wafer supply constrains our ability to fully capitalize on the opportunity. We know the wafer headwinds will abate, but we remain uncertain when, so today we are carefully managing our partners’ needs, and those of the growing RAIN market, against that limited wafer supply. Endpoint IC demand surged in the first quarter. Revenue and bookings exceeded our expectations and set quarterly records, driven, in part, by enterprises accelerating their digital transformation. At the same time, worldwide wafer demand also surged, restricting our wafer upside. Leveraging that strong demand and tight supply, we sold a significant amount of fully reserved endpoint IC inventory in the first quarter. Despite us shipping record endpoint IC volumes, our inlay partners are, for the most part, operating hand-to-mouth, having consumed their own inventory. Recall we anticipated today’s wafer shortfalls back in mid-2020, and built 200-millimeter wafer inventory in the depths of the pandemic. In hindsight, we didn’t build enough. We shipped that prebuilt inventory in first quarter 2021 at a pace that significantly exceeds our quarterly 200-millimeter wafer supply. Also recall our newly introduced Impinj M700 ramped more slowly in 2020 than we hoped, as our partners focused on existing volume runners even as we invested in additional 300-millimeter wafer post-processing capacity. In hindsight, we didn’t invest soon enough. First quarter 2021 M700 demand was many times larger than third quarter 2020, outstripping our current 300-millimeter post-processing capacity. With our capacity expansion scheduled to begin coming online in third quarter, for now we are maturing the capacity we have. Looking into second and third quarters, endpoint IC demand far exceeds our wafer supply. And until our M700 post-processing capacity expansion is fully operational later this year, our 300-millimeter output remains constrained. We spoke last quarter about navigating the crossover between our declining 200-millimeter inventory and our ecosystem ramping the M700, but with today’s constraints, our focus is simply total unit volumes. Short of a significant wafer increase from our foundry partner, we do not expect endpoint IC revenue to grow in the second quarter, despite 2021 orders already exceeding total units shipped in 2020. We plan to moderate our inventory burndown, at least for the next two quarters, to stretch our IC supply through 2021. In so doing, we recognize our product shipments will not satisfy customer or market demand, and we will need to prioritize those shipments. First quarter systems revenue declined quarter-over-quarter. Delays at our packaging subcontractor restricted our reader IC supply, causing a revenue shortfall that exceeded increased revenue from improved reader sales. We expect those packaging delays to moderate in second quarter, but reader IC supply will remain below demand and we expect to carry significant backlog into third quarter. Like for endpoint ICs, our reader IC partners are operating hand-to-mouth. Reader revenue increased, bucking typical seasonal quarter-over-quarter declines, with green shoots in partner-led dock-door opportunities driving reader strength in supply chain and logistics. But here again, demand exceeded supply, with temporary component shortfalls limiting our reader production and causing some opportunities to shift into second quarter. Also, our partner channel reduced their aggregate inventory, with certain reader products at very lean levels. We anticipate the component shortfalls to moderate and supply to normalize in second quarter. In retail, we shipped the first production units of our RAIN-based loss-prevention engine, recognizing modest first quarter revenue. We expect to largely deliver the remaining units against the $6 million prepayment from the visionary European retailer in second quarter. For the second consecutive quarter, we also generated meaningful revenue from a self-checkout deployment by a leading global retailer based in Asia, with that retailer now looking at RAIN-based loss prevention. Today, I am even more convinced that self-checkout and loss prevention represent a terrific opportunity for our platform, with the potential to grow our long-term endpoint IC opportunities via the 100% tagging required by touchless consumer self-checkout. On the organizational side, we are thrilled to welcome Steve Sanghi to our board of directors. Steve brings with him a wealth and depth of operational and business insights, and is already providing valuable input to our business. I look forward to Steve’s advice and help in the months and years ahead. We are also thrilled to announce that Brian Wong, a four-time private company CEO, will join Impinj in early May as our chief product officer. Brian brings 35 years of technical and business expertise in emerging technology markets, as well as deep semiconductor know-how. Brian, welcome to the team and happy birthday today. In closing, we delivered a record bookings quarter, strengthened our team and see strong demand and growth opportunities ahead. We exceeded our profitability guidance, delivered positive adjusted EBITDA and positive free cash flow. We also face IC supply constraints that require empathy for and close alignment with our partners as well as superb operational execution by us. With the utmost confidence in the Impinj team, I am energized by the opportunities ahead and our efforts to deliver against them. I will now turn the call over to Cary.

Thank you Chris; and good afternoon everyone. Today, I will review our first quarter financial results and provide our second quarter outlook. First quarter revenue was $45.2 million, up 24.1% sequentially compared with $36.4 million in fourth quarter 2020 and down 5.4% year-over-year from $47.8 million in first quarter 2020. First quarter endpoint IC revenue was $38.1 million, up 33.5% sequentially compared with $28.5 million in fourth quarter 2020, and up 13.1% year-over-year from $33.7 million in first quarter 2020. Endpoint IC revenue exceeded our expectations, setting a new quarterly record, despite facing a difficult comparison to first quarter 2020 that included $6.2 million of customer expedite requests. Given the tight supply environment, we were able to sell a significant amount of fully reserved inventory, benefiting both our top and bottom lines. Looking forward, we expect second quarter 2021 endpoint IC revenue to decline sequentially, as we stretch our supply. First quarter systems revenue was $7.2 million, down 9.6% sequentially compared with $7.9 million in fourth quarter 2020, and down 49.3% year-over-year from $14.1 million in first quarter 2020. Reader revenue increased, while gateway and reader IC revenue declined, sequentially and year-over-year. Gateway revenue faced a difficult comparison to first quarter 2020, which had significant revenue from the first large North American supply chain and logistics project. Reader IC revenue was constrained by the packaging delays. We expect second quarter 2021 systems revenue to grow sequentially, as we and our partner deliver the loss-prevention solution to the visionary European retailer. Please note these shipments as you model your third-quarter comparisons. First quarter gross margin was 50.3%, compared with 50.4% in fourth quarter 2020 and 46.1% in first quarter 2020. The quarter-over-quarter decrease was driven by product mix, partially offset by sales of fully reserved inventory and leverage against indirect costs. The year-over-year increase was driven by the sale of fully reserved inventory compared to excess and obsolescence charges in first quarter 2020, partially offset by product mix. The first quarter benefit from selling the reserved inventory was 220 basis points. Total first quarter operating expense was $21.9 million, compared with $21.5 million in fourth quarter 2020 and $19 million in first quarter 2020. The sequential increase was due primarily to increased payroll taxes and professional services. Research and development expense was $10.3 million. Sales and marketing expense was $5.7 million. General and administrative expense was $5.8 million. First quarter adjusted EBITDA was a profit of $900,000, compared with a loss of $3.1 million in fourth quarter 2020 and a profit of $3 million in first-quarter 2020. First quarter GAAP net loss was $9.4 million. First quarter non-GAAP net profit was $300,000, or $0.01 per share, using a weighted-average diluted share count of 25.7 million shares. Turning to the balance sheet, we ended the first quarter with cash, cash equivalents and short-term investments of $119.3 million, compared with $106.1 million in fourth quarter 2020 and $119.2 million in first quarter 2020. The sequential increase was due primarily to reduced inventory, proceeds from stock options exercises and positive adjusted EBITDA. Inventory totaled $28.1 million, down $8.3 million from the prior quarter. Our convertible notes moved into current liabilities because our stock price exceeded 130% of the conversion price for more than 20 of the 30 consecutive trading days ended March 31. Also, our convertible notes liability now reflects the par value adjusted for the debt issuance cost following us adopting the new convertible debt accounting guidance in January. First quarter net cash provided by operating activities was $9.4 million. Property and equipment purchases totaled $4.4 million. Free cash flow was positive $5 million. Before I turn to our second quarter guidance, I want to highlight a few items that were unique to the first quarter. I also want to give an update on a few of our strategic initiatives. First, packaging delays for our high-margin reader ICs will improve in second quarter and reader IC revenue will grow sequentially. To expedite deliveries, we are paying increased packaging cost for our reader ICs. We anticipate normalized reader IC revenue in third quarter 2021. Second, strong endpoint IC bookings continued in the first quarter, resulting in record bookings. Like for first quarter, we embedded a lower turns assumption into our second quarter revenue guidance than in a typical quarter. We assume our second quarter 2021 endpoint IC revenue will be supply, not demand, limited. From today’s vantage point, accelerating M700 production and adoption will be a key factor in the pace of third-quarter endpoint IC revenue growth, but absent increased wafer supply from our foundry partner, endpoint IC revenue growth will remain constrained, potentially through year end. Third, capital expenditures will remain elevated in second quarter, as we deploy additional 300 millimeter post-processing capacity to increase our production throughput beginning in third-quarter 2021. Turning to our outlook, we expect second quarter revenue to be between $41.5 million and $43.5 million, a 60% year-over-year increase at the midpoint of the range compared with $26.5 million in second quarter 2020. We expect adjusted EBITDA to be between a loss of $1.5 million and breakeven. On the bottom line, we expect a non-GAAP loss between $2 million and $500,000, reflecting a non-GAAP loss per-share between $0.08 and $0.02 on a weighted-average diluted share count between 24.1 million and 24.3 million shares. In closing, I want to thank our Impinj team, our customers, our suppliers and you our investors, for your ongoing support. I will now turn the call to the operator to open the question-and-answer session.

Ladies and gentlemen, at this time, we'll begin the question-and-answer session. [Operator Instructions] And our first question today comes from Scott Searle from ROTH Capital. Please go ahead with your question.

Hey, good afternoon. Thanks for taking my questions. Nice job on the quarter in a very, very difficult operating environment. Hey just Cary quickly just to confirm the reserved inventory input, did I hear 220 basis points, so about 1 million of reserved inventory was sold in the quarter? And is the expectation in the June quarter, will there be any additional reserved inventory sales, is that completely depleted? And then just in terms of the visibility there of endpoint ICs, I would imagine given the bookings that you're talking about and being supply constraint that you basically are virtually 100% visibility to what you're forecasting in the current period.

Hey Scott, thanks for the question. You heard correctly and your math is good. There – it was a 220 basis point impact to gross margin benefit from the sale fully reserved inventory, from a cost perspective that was about a $1 million worth of inventory. There is still some fully reserved inventory remain, so could perhaps some could come through in the second quarter, but I believe the bulk of this can have been in the first quarter. And then your next question around – we don't have 100% – go ahead.

No, that I was just going to reiterate the question, sorry.

Okay. From endpoint visibility, we do have enhanced visibility, customers are booking further into the future. For the second quarter, we spoke in lower terms assumption, similar to what we did in the first quarter, that's because of enhanced visibility I guess, but also because of our desire to stretch our supply through the quarter. So it’s a supply limited guidance, not a demand limited guidance. At this stage, we also have some visibility into Q4 given the duration of the bookings.

Okay, great.

This is Chris, I’ll just add a little bit more there. Your question was kind of getting at like the visibility that we have in the second quarter, but just recognize there are components – on the system side of our business, for example in our readers. And we're also working through packaging constraints on our reader IC. So there is – we still have things to work through in the quarter.

Got you. And Chris, maybe just to dig in a little bit in terms of managing the transition of products in 200 millimeter, 300 millimeter, the M700, I think is on the 300 millimeter. What are the constraints from a customer standpoint in this, in terms of managing that transition? Are you going to be able to push some of your customers quicker and inlay partners quicker in that direction, or they're still just going to continue to move at their own pace on that front? And I guess as part of that given the globally constrained environment that we're in, do you expect to maintain share in this environment or guys like NXP being able to allocate more of their wafer capacity to RFID tags and otherwise?

Okay, let me try to do my best to answer those questions and come back to me if I don't catch all of it. So we see strong demand today for both our 200 millimeter products, that's for example, our existing Monza R6, as well as our 300 millimeter product that being our M700 strong demand for both. We are constrained in terms of our availability in both for the latter of the year, 300 millimeter M700. The constraints are really focused a little bit more right now on the wafer post-processing, which we are maturing at this point in time. But of course, yes, you were right, the whole industry has wafer constraints as do many other industries. And so we would – I would say that from our perspective the entire industry is constrained in terms of the endpoint IC availability. You also asked a little bit about share. We typically don't get visibility into share until the end of the year when we get that RAIN Alliance numbers. We feel good about our position in the market today about the M700 and what it brings to the market. So we'll report out later when we actually get a final share numbers, but I can't say that – from where we stand right now, we feel very good about our position and we look for our ability to maximize total unit volumes in the second – going forward from here and especially in the second half of the year.

Great. And lastly, if I could, just clarification in terms of the loss prevention engine, the majority of that the remaining component will all ship in this quarter as well, or is that also component constrained in terms of what you're able to ship and recognize on the quarter? Thanks.

Yes. We shipped a handful of units at the end of Q1, we will launch – we ship the remaining $6 million in Q2.

Great. Thank you.

Okay. Thank you, Scott.

And our next question comes from Harsh Kumar from Piper Sandler. Please go ahead with your question.

Hey guys, this is Matt on for Harsh. Congrats on the solid results and thanks for letting me ask a question. First, how should we think about the gross margin for the trajectory as the – 2021, are there any costs that you guys are having to deal with either the supply constraints and have you been able to pass these costs onto the customers? And I guess anything outside of mix that we should be thinking about as we think about gross margin in 2021?

Yes. Thanks Matt. There are a lot of factors impacting gross margin this year. First let me start just with Q2. Q2 gross margin will benefit from the loss prevention engine revenue primarily landing in that quarter. So we anticipate gross margin going up in the second quarter. As we look into the third quarter, we'll lose that benefit from the higher systems revenue, but we will get back at least partially offsetting is our reader IC, which is our highest margin systems product, we'll get back to a more normalized state. So those are kind of two puts and takes that happen in Q2 and then moving into Q3. And then kind of an overarching comment M700 because of the structural advantages in there, will be accretive to gross margin, as that mix increases relative to the rest of endpoint IC sales and to our overall business. So we anticipate M700 sales increasing quarter-over-quarter throughout the rest of the year in the next year and that will provide some gross margin lift as it go.

Matt, this is Jeff, as it relates to your question regarding pricing, we are evaluating a comprehensive set of options, of course, as you can imagine, there are a number of short and long-term factors to consider in making a pricing decision, including but not limited to our existing partner agreements. But again, we are considering a full range of pricing options going forward.

Thanks for those insights guys. And then for my second question, I understand that every customer and every geography is different, but as we think of kind of this global reopening and retail, kind of what inning would you characterize that we are and how have retail customer conversations changed over the last 90 days with pickup in some COVID cases around the world here recently.

Matt, this is Jeff again. I think the first comment I would make is that we are encouraged as we and our partners are re-engaging in end customer opportunities around the globe. The pace of recovery varies by geography, for example in the U.S. and China, I think we see recovery moving kind of faster pace than in other markets. In particular, North American performance apparel and footwear are continuing to hold up well and better when compared to Europe. So overall the pace of economic recovery is different by geography, but overall we're encouraged by the adaptation of our partners and customers and Impinj, and we look forward to those emerging opportunities in the quarters ahead.

Thanks guys, congrats again on the solid results.

Thank you, Matt. Thank you.

[Operator Instructions] Our next question comes from Derek Soderberg from Colliers. Please go ahead with your question.

Hi everyone. Thanks for taking my questions. I just want to clarify something from the script. The commentary on 300 millimeter output will remain constrained until M700 post-processing capacity has expanded. It sounds like the bottleneck is more in your control, correct? So if you had sort of already made that 300 millimeter transition, would you be able to completely fulfill that M700 demand you're seeing today with potentially excess capacity thereafter?

Okay. Thanks Derek, so this is Chris speaking. As of right now the bottleneck is on our side. We are constrained by our 300-millimeter post-processing capacity getting wafers through the pipe. As we said, we've got additional capacity that we invested and will start coming online in the third quarter. And we expect to continue to ramp that post-processing throughput through the end of the year, especially as we mature the technology that we're using, the plasma dicing and get – essentially build up our machine capacity. That said, we are not unlimited in our 300-millimeter wafers, and we will have 300-millimeter wafer constraints through the latter part of the year, unless we get additional wafer upside from our foundry partners. So as we stand right now, post-processing constraints in the limit, wafer constrained.

Got it. As my follow-up, I wanted to talk about recent commentary from your largest customer on the size of the market as they see it. They called for a $40 billion unit opportunity in apparel or as I think you've stated that apparel is more like $80 billion. I was hoping maybe you could bridge that gap for me. And then also, I think logistics, they said it was a $60 billion unit opportunity and $200 billion in food. I think it would also be helpful, Chris, to hear your thoughts on their estimates in non-apparel markets. Thanks.

Sure. I will do my best to answer those questions. The answers will be kind of a little bit soft answers because it depends on how you evaluate the market and the time frame over which you do your evaluation. Our best estimate of the total retail apparel market opportunity worldwide is about 200 billion units. We have judged that down to about 80 billion based on what we think is the servable market or the market that's available to us, basically the servable market to us. But that's the whole market, including the long tail of adoption, kind of if you want to use the crossing the chasm model, the laggers as well. The near-term opportunity, of course, is a bit smaller. And depending on where you cut your time frame, you may end up with smaller or larger volumes. We continue to believe that the total available market opportunity on the retail side for us is about 80 billion units. That's from where we stand today. Supply chain and logistics is a little bit of a different answer. It depends on how broadly you cast your net for supply chain and logistics. If you're just looking at boxes and cartons and pallets that are shipped as a smaller number, if you look at kind of all the parcels they get shipped, including for automotive and retail and so many other opportunities, the number becomes very, very large. And interesting in the food space, if you look at food, with the lens of boxes and pallets going, for example, to restaurants, it's relatively smaller opportunities and several hundred million units per year. If you look at the total food opportunity, including food items that go to consumers, it's gigantic. It's measured in the trillions. So we feel that our view of the market is very consistent with our partners. It's just we take a little bit different lens on things.

Perfect, thanks.

Does that answer your question, Derek?

Yes.

And our next question comes from Jim Ricchiuti from Needham & Company. Please go ahead with your question.

Hi, good afternoon. When we see an environment like this where we have this kind of supply chain shortages, component shortages, there’s always a risk for double, in some cases, triple ordering. So I'm wondering to what extent you are monitoring that. And then to what extent are some projects perhaps discretionary for some of your end customers and maybe things just slide further out until there's a better supply/demand balance?

Thanks Jim. So this is Chris. I'm going to take the first part of the question and answer, and then I'm going to hand off to Jeff. Of course, double ordering is always a risk, especially in a two-step distribution model like we have. But from our perspective today, our team’s seasoned, our purchase orders are noncancelable, our visibility into our partner inventory levels is relatively good, and it shows they are lean. So we do believe that the demand is real out in the market. In terms of how much of that opportunity can push out because it's not – if you want to use the word mandatory. When you're on the other end of customer calls as we are – every project is important to every customer. Everything that we can deliver against is important. Some, of course, have a higher level of criticality, which is where we talk about prioritization, for example, instead of going into hospitals or pharmaceuticals or COVID-19, of course, would have a higher priority. But our goal is to support all of our customers and our end markets as best we can. Jeff, anything you'd like to add there?

Jim, I'd just like to reinforce that our partners are very important to us. And so we're working very closely with our partners to understand the needs of their end customers. And working together, we are – we have a common objective to optimally match our available supply to those end customer requirements in the order of priority. We're mutually aligned in our desire to continue to service those end customer deployments as well as possible. And I'm very proud of our team and very thankful and grateful for the engagement of our partners as we work together to navigate a complex supply/demand environment.

And Jim, this is Chris. I want to jump in and say one more thing and I think this is very important for everybody to realize. Our industry delivered more than 20 billion units last year. RAIN RFID touches the fabric of everybody's life. It's in State Department issued IDs. It's in retail apparel items, it's in pharmaceuticals. It's associated with food delivery. It goes on aviation bags, it goes on automotive parts, on airbags and bumpers. It's core to the fabric of the supply chain today. And you can say, well, can some things push out and go and yes, they can. But the disruption that can be caused by a severe shortfall in our industry can ripple through the entire supply chain. So we are focused on as best we can, delivering against that opportunity and minimizing the impact. But the point I'm trying to make there is that its not like RAIN is optional anymore. We're woven into the fabric of the worldwide supply chain.

That’s a fair point, Chris. Thanks for that. And Cary, maybe this one's for you. If we see these constraints persisting through year-end, I guess what I'm wondering is, do you perhaps recalibrate some of the expenses in response to this kind of unprecedented environment that we're in?

Yes. So a good question, Jim. With customers booking further into the future, we have better visibility into the second half demand than we would otherwise. And as – we signaled that Q2 endpoint ICs are going to be lower, in fact, we signaled that last quarter, where we're coming out of a couple of super seasonal quarters for endpoint IC. We knew Q1 was going to be strong. And we anticipated Q2 coming down from a seasonal perspective or a sequential perspective, that is. And then when you layer in the stretching of our inventory, while we're – our new 300-millimeter capacity is coming online, you see that sequential decrease in endpoint ICs coming into our guidance or being factored into our guidance. But when we look into the third quarter, we see endpoint IC revenue growth. Now that – obviously, that's going to be determined to a great degree by the production and adoption of the M700, but we see growth in the third quarter. Over the last four or five years, the sequential growth in Q3 from Q2 has been in the 15% to 20% range. And that's a pretty good benchmark or as good a benchmark as we have right now. That being said, that pace of growth going into Q3 is still limited by supply. The demand is out there to do more, but the supply has limited it. And we're also in the position where we can look into Q4 right now. We had meaningful backlog for Q4. And Q4 endpoint ICs typically go down again over the last four or five years, go down 5% to 10%. I see us beating that in Q4. So when I look at that type of a forecast and I come back to OpEx, I don't necessarily see a reason to change our OpEx structure. We'll step up a little bit in Q2, some of the non-wage spend that I anticipated in Q1 actually slid into Q2. We finished a lot of our investment hiring last year as we've talked about many times on these calls, but there are incremental hires in 2021 that will continue at pace. We think the opportunity, though we're supply constrained right now, we think that the opportunity and demand for RAIN RFID is really strong. And we want to continue being in front of that investment curve.

Thanks very much, guys.

Thank you, Jim.

And ladies and gentlemen, showing no additional questions, I'd like to turn the floor back over to management for any closing remarks.

This is Chris speaking. I'd just like to say thank you all for joining the call today. And I hope you and your loved ones are and remain safe and well. Thank you again. Bye-bye.

Ladies and gentlemen, with that, we'll conclude today's conference call. We do thank you for attending. You may now disconnect your lines.