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nLIGHT, Inc. (LASR -1.00%)
Q3Â 2019 Earnings Call
Nov. 04, 2019, 5:00 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good morning, good afternoon, and welcome to the nLIGHT Third Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode.
[Operator Instructions]
Please note, this event is being recorded.
I would now like to turn the conference over to Jason Willey. Please go ahead.
Jason Willey -- Senior Director, Investor Relations and Corporate Development
Thank you, and good afternoon, everyone. As the operator said, I am Jason Willey, nLIGHT's Senior Director of Investor Relations and Corporate Development. Scott Keeney, Chief Executive Officer of nLIGHT, and Ran Bareket, Chief Financial Officer, will be speakers on today's call. If you have any questions after the call, please direct them to me at (360) 567-4890 or [email protected]. A copy of today's earnings press release is available on our website at www.nlight.net.
In addition, you can access an archived version of today's call from our website. In today's call, our discussion will contain forward-looking statements, including statements about financial projections, future business growth, trends and related factors, prospects for expanding and penetrating addressable markets, and our strategic focus and objectives. Forward-looking statements are subject to risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings. As results may differ materially from those projected on today's call, we undertake no obligation to update publicly any forward-looking statement, except as required by law. Additionally, certain non-GAAP financial measures will be discussed on this call.
We have provided reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures in our earnings release, which can be found on the Investor Relations section of our website. I would also like to note that members of nLIGHT's senior management will be available to meet with analysts and investors at the FABTECH trade show in Chicago on Tuesday, November 12. If you are attending the show and are interested in meeting, please email me at [email protected].
I will now turn the call over to Ran to go through the financials and outlook. Scott will then provide additional color on the business. We will then be glad to take your questions.
Ran Bareket -- Vice President and Chief Financial Officer
Thank you, Jason, and good afternoon, everyone. Revenues for the third quarter were $43.8 million, down 14% year-over-year. During Q3, sales to the industrial end markets were $19 million, representing 43% of total revenues, and down 9% year-over-year. Sales to microfabrication end markets were $13.3 million or 30% of total revenues, and down 33% year-over-year. Aerospace and defense sales were $11.6 million or 26% of total revenues, and grew 13% compared with the third quarter of 2018. On geographic basis, sales to China were $17.4 million in the third quarter of 2019, or 40% of total revenues, up 4% compared with Q3 2018.
Sales in North America were $16.4 million, representing 37% of total revenues and down 19% year-over-year. Rest of the world sales were $10 million, down 30% compared with the third quarter of 2018 and were 23% of total revenues. The Chinese industrial end market represented approximately 25% of overall sales during the third quarter of 2019. Gross margin was 29.6% in the third quarter, a decrease of 580 basis points year-over-year.
In the third quarter of 2019, gross margin was negatively impacted by approximately $1.1 million or 260 basis points related to the US-China tariff implemented in the middle of 2018. Gross margin was also negatively impacted by the mix of end market sales, less favorable fixed cost utilization and pricing in the Chinese industrial end market. Those headwinds were partially offset by cost reduction and mix to higher power in the industrial end markets.
Operating expenses were $13.7 million during the third quarter compared with $13 million in the third quarter of 2018. Q3 '19 operating expenses included $1.1 million of stock-based compensation. Year-over-year growth in the operating expenses reflect investment in R&D to position the business for long-term growth opportunity and higher public company costs. Excluding stock-based compensation, we held operating expenses flat over the past three quarters. Third quarter operating loss of $700,000 was negative 1.6% of revenue and compares with an operating profit of $5.1 million or 10% of revenues in the third quarter of 2018. Our adjusted EBITDA for the third quarter was $2.7 million or 6.2% of revenues. This compares to $9.2 million or 18% of revenues in Q3 2018. GAAP net loss for the third quarter of 2019 was $800,000 compared with net income of $4 million in Q3 2018.
GAAP EPS for the third quarter of 2019 was a loss of $0.02 per share compared with net per income diluted shares of $0.10 in the third quarter of 2018. Non-GAAP EPS, which excluded the impact of stock-based compensation, was $0.01 per diluted shares in Q3 2019 compared with $0.15 per diluted shares in Q3 2018. Turning to the balance sheet we ended Q3 with total cash and cash equivalents of $139 million. DSO for the third quarter of 2019 was 61 days. Inventory at the end of the quarter was $46 million, representing 128 days of inventory. Inventory level have risen to support higher unit volume, mainly in the industrial end market. During Q3, we utilized $700,000 in cash in operating activities. Capital expenditures for the quarter were $3.1 million or 7% of revenues.
Turning to the guidance for the fourth quarter of 2019. We expect revenues to be in a range of $36 million to $40 million. This reflects the impact of ongoing global trade and economic uncertainties across our business and continued slower activity with several of our large customers in the microfabrication end market.
Based on our current expectation for product mix, we see gross margin for Q4 2019 in the range of 25% to 28%, which includes approximately $400,000 of stock-based compensation and negative impact from tariff introduced since mid-2018 of approximately $1.4 million or around 370 basis points. Operating expenses for Q4 are expected to be approximately $16 million, which includes approximately $3 million of stock-based compensation. For the fourth quarter, we expect adjusted EBITDA in a range of a loss of $2 million to break-even. We expect Q4 average basic and diluted share at approximately Q3 2019 level.
I will now turn the call over to Scott.
Scott Keeney -- Co-Founder and Chief Executive Officer
Thank you, Ran. As Ran reviewed, our third quarter results reflect an operating environment that remains challenging, which is having an adverse impact on two of the three end markets we serve.
Despite the uncertainties overhanging global industrial activity and recent headwinds in consumer electronics-driven applications, we are excited by what we have accomplished in developing and releasing differentiated products. This includes progress in key strategic areas such as Corona, fiber laser welding and directed energy solutions. We remain focused on driving higher performance and lower costs across our product portfolio. In the industrial end market, our revenues declined 9% year-over-year in the third quarter. While the global macro environment and competition in China remained headwinds, we are driving key initiatives for positioning our industrial business for long-term growth outside of China. This includes welding applications, where today we introduced our new welding product family with integrated switches and couplers.
This offering, in combination with nLIGHT's growing portfolio of high-power fiber lasers, opens a large addressable opportunity. It also builds on recent customer momentum we are seeing across our current welding solutions. We continue to gain significant traction on the design win front with Corona, our programmable fiber laser. This growing customer adoption will be on display at next week's FABTECH expo in Chicago. A number of global materials processing tool vendors will be demonstrating differentiated capabilities of Corona and our tools. We are particularly proud to have secured our first global Tier 1 design win with Corona. We expect revenues from this customer opportunity to begin ramping in the middle of 2020.
Within China, our overall fiber laser business is shifting toward high power and ultra-high power sales. Our roll-out of higher power lasers in China has helped support our sales as both competitive and geopolitical headwinds continue to persist in this geography. During Q3, our 6-kilowatt-and-above fiber lasers grew 26% year-over-year. Sales in this category accounted for approximately 40% of our total fiber laser sales. This compares to 30% of total fiber laser sales in the comparable period in 2018. Sales in the 2-to-5-kilowatt range were approximately 39% of fiber laser sales in Q3 2019. We also continue to aggressively drive down the cost of our fiber lasers. Over the past two years, we have cut our cost per watt by over 50%. We are on track to achieve even more rapid cost reductions in the future.
In the microfabrication market, we have seen much slower activity across our customers' focus on consumer electronics and automotive and applications. Within our customers serving consumer electronics, we believe activity has been particularly slow in 2019 for those exposed to the smartphone market. We believe more muted design and technology refreshes have resulted in limited manufacturing retooling, a key driver for growth in the lasers we help power. Additionally, our inventory levels at several large customers are slightly elevated due to a combination of softer end market activity and ordering ahead of anticipated tariffs we believe happened in Q2 2019. These inventory dynamics, combined with ongoing macro-related uncertainties and consumer electronics softness are impacting our near-term outlook for this end market.
Based on our current view into Q4 activity, we expect our microfabrication end market to decline approximately 20% year-over-year in 2019. We believe this decline is in line with declines in the underlying solid-state laser market we are serving. Looking forward, we see lasers continuing to displace legacy technologies in the markets served by our microfabrication customers. We further believe our focus on innovation around high brightness and improved cost performance will enable us to drive leadership in semiconductor lasers and open new application opportunities. While our visibility into specific business for 2020 is limited at this point, we expect the next generation of a number of consumer electronics devices and the initial roll-out of 5G solutions to generate meaningful supply chain retooling, a key driver for new purchases of certain of our customers' lasers.
In the aerospace and defense end market, we grew revenues 13% year-over-year in the third quarter. The record quarter was driven by ongoing momentum at several of our core customers. This is the seventh consecutive quarter of double-digit year-over-year growth for this end market. We continue to benefit from our position as a core technology provider to several long-standing programs. We're even more encouraged by the clear trend toward utilizing lasers in high-energy defense applications. We are developing new products that provide higher performance and lower size and weight to enable highly differentiated solutions for this opportunity.
We recognized small amount of revenue associated with direct energy research in this quarter. We view directed energy as a key long-term growth opportunity for nLIGHT, and believe our technology and products are well positioned for this market as it continues through the R&D phase and evolves to field deployments.
In conclusion, while the current operating environment remains challenging, our enthusiasm around the long-term industry opportunity and nLIGHT's positioning is unchanged. We remain committed to investment in our technology road map and focused on executing to key priorities needed for driving design wins, expanding our customer footprint and continuously improving the cost and performance of all of our products.
This focus on innovation is evident in our growing traction in high-power fiber lasers, the design win momentum we are seeing with Corona, in our leadership position in semiconductor lasers, and in the strong growth we are seeing in aerospace and defense end markets. Sustained execution in these areas will enable us to deliver growth and margin expansion over the long term. In closing, I would like to thank the entire nLIGHT team for their efforts during the third quarter.
With that, we'll now hand the call over to Q&A.
Questions and Answers:
Operator
We will now begin the questiona and answer session.
[Operator Instructions] Our first question comes from Greg Palm with Craig-Hallum Capital Group.
Greg Palm -- Craig-Hallum -- Analyst
Yes, thanks, good afternoon. Wanted to start with gross margin and some of the negative impacts that you talked about. Can you maybe quantify or at least buck it out in addition to the tariff impact the headwinds from mix, volume and negative pricing?
Ran Bareket -- Vice President and Chief Financial Officer
Yes, sure. This is Ran. Thank you for the question, Greg. So yes, there is an impact on essentially all of the above that you mentioned. I will try to at least prioritize those different topics. So there is definitely an impact of the tariff. This quarter, the impact of the tariff, the tariff was $1.1 million. It was 260 basis points. Next quarter, we are talking about roughly 370 basis points impact on just because of the tariff. The volume, the revenue is going down, but the dollars of the tariffs stay the same, roughly.
So that's definitely one of the items. Then definitely there is the mix between the end markets. So you saw that there was a reduction quarter-over-quarter or year-over-year between microfabrication versus the industrial end market that makes impact negatively our margin. Then the third topic is the volume. Definitely, the reduction in the volume on our fixed costs impact our margin as well. You mentioned that at the end, I'm talking about the pricing in China. The pricing in China impact our margin as well. However, most of it was offset by cost reduction on the industrial and mainly on fiber laser in the industrial end market as well as mix toward higher power. As we mentioned in the past, higher powers, obviously, coming with a better margin. That mix helped us to offset some of the price reduction in China.
Greg Palm -- Craig-Hallum -- Analyst
Got you. Okay. And then the Q4 guidance specifically on gross margin, the delta between that and the September quarter, in addition to a higher impact from tariffs, is that mostly volume related? Or is there anything else going on?
Ran Bareket -- Vice President and Chief Financial Officer
It's the same topic. It's mostly volume, it's tariff and it's mix.
Greg Palm -- Craig-Hallum -- Analyst
Okay. And any more thought in terms of mitigating this tariff impact by moving some manufacturing over to Asia? Or is that not yet in the discussion?
Ran Bareket -- Vice President and Chief Financial Officer
No. It's definitely in the discussion. And we are moving some production from the US to China and vice versa in order to reduce the impact of the tariff. It will take time, though. It will take time. We have inventory on hand that we already produced it in certain places, either in China or in the US. It will take time, but we expect that -- at the end of Q1, Q2 next year, we will see some reduction in tariff. Everything being equal, same level of tariff, same mix, obviously.
Greg Palm -- Craig-Hallum -- Analyst
Okay. And then I guess last one for me. Scott, you mentioned this Tier 1 Corona win. Congrats on that. I think you also mentioned sales ramp potentially starting in mid-2020. Is this a brand-new customer? And any way that we can sort of think about the magnitude of the win, and how big of a customer this could be over time?
Scott Keeney -- Co-Founder and Chief Executive Officer
Yes, sure, Greg. Thanks. Definitely, it's exciting to see the progress with Corona with this customer and others. I think probably the best opportunity will be at FABTECH in Chicago, where you'll see various customers displaying Corona there. And it is a new customer. There are several other new customers that are in the funnel, and Corona is certainly proving out to be a very important part of our differentiation. And again, a lot more detail will be available on the show floor at FABTECH.
Greg Palm -- Craig-Hallum -- Analyst
Okay, great. I'll hop back in queue, thanks.
Operator
Our next question comes from Jim Ricchiuti with Needham & Company.
Mike Cikos -- Needham & Company -- Analyst
Hey guys, this is Mike Cikos on for Jim Ricchiuti. Wanted to ask you first on the microfabrication business. I think you guys discussed how there was some large inventory build at several of your large customers. Or -- I'm sorry, let me rephrase that. Several of your large customers currently have elevated inventory. And I wanted to know, do you guys have a gauge for when those customers will have finished working those inventory levels down?
Scott Keeney -- Co-Founder and Chief Executive Officer
Yes, a good question. There was a buildup inventory for several factors, just due to the cycle in the industry and also the tariffs. And it depends on the customer and the application. But generally, by the first half of next year, we see those inventories working their way out through the value chain.
Mike Cikos -- Needham & Company -- Analyst
Okay. And I guess, following on that topic, between industrial and microfabrication businesses, can you guys kind of discuss the visibility that you have into those markets currently? I'm interested in how cloudy it might get, given the inventory build that you're talking about here.
Scott Keeney -- Co-Founder and Chief Executive Officer
We think we have pretty good visibility into the inventory build. We've known about it for some time. What we don't have visibility into is certainly the end markets and in terms of the uncertainty in geopolitical and otherwise. So we do believe that there continues to be a trend toward more advanced lasers for various microelectronics applications, I think we're very well positioned there. So we do see things stabilizing, but taking some time to get back to the growth that we anticipate there in microfabrication. And then with respect to industrial, we don't see that sort of inventory. The lead time there is much shorter. And so there, again, we don't have visibility into the sort of higher level macroeconomic trends. But again, what we do have visibility into is the design wins that we're pursuing. And with the new products that we're launching for Corona, for cutting, the new welding products we just launched, we're feeling like we've got good insights into continued adoption by new customers in that space.
Mike Cikos -- Needham & Company -- Analyst
That's helpful. And then one more, if I could. On the new range of -- new family of lasers for the welding applications, can you help us better understand how these welding technologies are differentiated from the competition? And I'll leave it at that. Thanks.
Scott Keeney -- Co-Founder and Chief Executive Officer
Great. Yes. So in welding, we do have sales in welding today, although a relatively smaller part of our business today with products that we have today. The family that we're launching at FABTECH allows us to access a much larger part of that market. And we do believe that, that is a market that is growing faster than the cutting applications. And as we continue to expand our work there, once again, Corona becomes a source of differentiation, and the ability to program our lasers for different beams for these different applications, we believe we'll continue to drive differentiation in that space.
Mike Cikos -- Needham & Company -- Analyst
Great, thank you.
Operator
Our next question comes from Andrew DeGasperi with Berenberg.
Andrew DeGasperi -- Berenberg -- Analyst
Thanks for taking my question. I think you mentioned that 40% of your revenue today was high power. Do you have a time line when you think that could be the majority of your revenue? Would it be 2020?
Scott Keeney -- Co-Founder and Chief Executive Officer
We don't have visibility into specifically how that will migrate over time. However, I will say that the migration so far has been fairly significant. It's over 40% in the last quarter, and that's up significantly from where we were, about double where we were just a year ago, and it was a very small percent the year before that.
So we're seeing continued migration to higher powers. And as you go up in power, it certainly becomes more difficult to provide those lasers. So we do see the continued trend toward higher power. And in addition to that, when you combine that with the higher performance of Corona, you get a much better differentiation. And we've just launched the 12-kilowatt Corona, the highest power programmable laser that is available. And again, we'll be showing that at FABTECH.
Andrew DeGasperi -- Berenberg -- Analyst
And just as a follow up, in terms of how quickly do you think those lasers could penetrate the market, the new ones you're announcing at FABTECH, on the cutting side? Do you foresee another nine to 12 months' time frame? Or do you think that would happen a lot sooner than what is normally the case?
Scott Keeney -- Co-Founder and Chief Executive Officer
Well, I think there's various customers and they're in various stages of the designing process. And some are ramping right now, some are at the earlier stages. So we anticipate continued growth in that space. But I will say that it is moving faster than is typical in previous because Corona is -- it provides differentiation for our customers in that space.
Andrew DeGasperi -- Berenberg -- Analyst
Got it. And then my last question is on the welding products you're launching. If -- I think this is not a laser system, correct?
Scott Keeney -- Co-Founder and Chief Executive Officer
Correct.
Andrew DeGasperi -- Berenberg -- Analyst
Are you really looking at the systems integrators who would provide this? And I guess, is there any particular -- is automotive really the one that you're focusing on?
Scott Keeney -- Co-Founder and Chief Executive Officer
Well, let's see. First question, yes, you're correct, we're not providing a system. I think that's important. We provide a much higher value-add at the laser level, but it is still a subsystem, if you will, for those system integrators. Today, the market that perhaps is driving our near-term growth is the battery EV market. But yes, broadly speaking, automotive is a very important part of the welding market with really a broad range of applications. It does go certainly outside of automotive, but that's an important driver in that space as companies are looking to use the laser welding automated processes in their new designs.
Andrew DeGasperi -- Berenberg -- Analyst
Great, thank you.
Operator
[Operator Instructions]
Our next question comes from Tom Diffely with D.A. Davidson.
Thomas Diffely -- D.A. Davidson -- Analyst
Yes, good aftrenoon. I'd like to focus some more on the new products that have come out recently. When you look at all the new products and the different power sizes, when you sit back and look at that, what do you think is the biggest long-term driver and maybe the biggest near-term driver of that new portfolio that we see has released?
Scott Keeney -- Co-Founder and Chief Executive Officer
Well, let's see. Thanks for the question, Tom. With respect to the industrial market, I think that Corona remains both the key near-term driver, and longer term, it will continue to evolve and become more sophisticated and drive new applications. So today, in industrial, Corona is allowing us to provide differentiation for our metal cutting customers. There's welding applications also coming along. And finally, even in additive manufacturing, there's certainly benefits to Corona. That's in industrial. I haven't talked about the aerospace and defense market, we're also developing products in that space where our superior performance in size, weight and power offers significant differentiation in a market that is poised to grow very rapidly. So those are sort of the two key themes to remember, it's about higher performance Corona in industrial, and then in the defense space, really a leading-edge technology that allows for the highest performance at the lowest weight.
Thomas Diffely -- D.A. Davidson -- Analyst
Okay. Great. And then, I guess, as a related question, when you look at pricing and perhaps more importantly profitability, do that simply scale with size -- power size to you? Or is the features inside the laser are more important than scale or size?
Scott Keeney -- Co-Founder and Chief Executive Officer
Yes. Features certainly are the dominant factor. And certainly, when we provide some of these differentiated products, it's very different from, say, a very standard product. In addition to that performance, though, it does scale with power also. As you go up in power, it gets much more difficult. So the competitive intensity is very different at the higher power. So as we've ramped up to over 40% at above 6 kilowatt, we see certainly very different competitive dynamics at the higher power level.
Thomas Diffely -- D.A. Davidson -- Analyst
Okay. Great. And then Ran, a quick question on the model itself, what was the percentage increase in tariffs that you saw during the quarter?
Ran Bareket -- Vice President and Chief Financial Officer
I can tell you -- I don't know what percentage, but I can tell you exactly, a year ago in Q4 last year, the additional tariff, what we are disclosing as the additional tariff that was imposed mid-last year, it was $550,000 or 120 basis points impact. If you are looking at Q4, the guidance that we gave for Q4, the impact will be 370 basis points or $1.4 million.
Thomas Diffely -- D.A. Davidson -- Analyst
Okay. Is that relationship or that ratio that the tariff went up? Or are there other factors involved?
Ran Bareket -- Vice President and Chief Financial Officer
There are many, many factors that impact the tariff in a certain quarter. It depends on what we manufacture, where, how much we are manufacturing. It's also the inventory level. If there is a change in the tariff and there was a change in the tariff during the last year, and so on and so forth.
Thomas Diffely -- D.A. Davidson -- Analyst
Okay. And then finally, would you consider that to be the kind of the peak tariff level you'll see on a percentage basis or a margin hit or could it expand from there?
Ran Bareket -- Vice President and Chief Financial Officer
From dollar perspective, again, it's hard to say if it's peak. It depends on -- obviously, I cannot talk about what will be the future of the tariff and if it will change or the weight will change. But everything being equal, and again, it depends on the mix and where we will produce, we believe that mid-next year, you will see some reduction again. But it's very, very difficult to estimate what would be the tariff. There are many, many assumptions behind it.
Thomas Diffely -- D.A. Davidson -- Analyst
Okay, thank for your time.
Operator
Our next question is a follow up from Greg Palm with Craig-Hallum Group.
Greg Palm -- Craig-Hallum -- Analyst
Yes, thanks. A couple more for me. I guess doing the math, it looks like industrial sales outside of China were down year-over-year. And I guess that seemed to be an area of optimism, at least from the Q2 call. So anything to call out there?
Ran Bareket -- Vice President and Chief Financial Officer
Yes. There was a reduction in this quarter, but -- on industrial end market. But if you will look at year-to-date, the industrial end market, although we are not disclosing that specific number, but if you will look at today, year-to-date, the industrial end market outside of China, there was essentially a growth there.
Greg Palm -- Craig-Hallum -- Analyst
Okay. And any top 10 -- I don't know if I missed this, but any 10% customers in the quarter or no...?
Ran Bareket -- Vice President and Chief Financial Officer
Yes. There are two top 10 customers, you will see that in the 10-Q that we will file on Wednesday. But one of them was Quick Laser and the other one was Raytheon.
Greg Palm -- Craig-Hallum -- Analyst
Okay. Can you quantify them now, or we got to wait for the Q?
Ran Bareket -- Vice President and Chief Financial Officer
No. Wait for the Q. It's two days. Wednesday, this week.
Greg Palm -- Craig-Hallum -- Analyst
All right, short wait. And then I guess just one last one on aerospace and defense, I know, Scott, you had some commentary I think about directed energy. Is that just tiny sales? At what point could directed energy become meaningful? And I guess that space just continues to ramp up really nicely here. So is that just end market demand? Or more sort of share gains, new customers, what's really driving the growth in that segment?
Scott Keeney -- Co-Founder and Chief Executive Officer
Yes, good. I think it's a market that is still in its early stages today. It is a portion of our revenue today, but it's a relatively small portion. It is a market that is poised to grow rapidly over the coming two to five years. And in that time frame, we expect to grow -- continue to grow rapidly in that space. And that's why we're developing new products that take our core platform of high-power semiconductor lasers and drive it to really the next level of performance that's needed in that space. These lasers are a much -- well, much more sophisticated set of lasers than are needed in the industrial markets. So there are some important differences, but they require the same core technology. And so that technology needs to be adopted for this market. So yes, I do think that it is a market that we are highlighting as a key source of growth over the medium term.
Thomas Diffely -- D.A. Davidson -- Analyst
Okay, all right, good luck going forward.
Ran Bareket -- Vice President and Chief Financial Officer
Thank you.
Operator
This concludes our question-and-answer session. I would like to turn the conference back over to Jason Willey for any closing remarks.
Jason Willey -- Senior Director, Investor Relations and Corporate Development
I'd like to thank everyone for their participation today and continued interest. And again, if you happen to be in Chicago, or have interest in seeing us at FABTECH next week, please get in contact, we'd love to schedule a meeting. Thank you, and have a good rest of your day.
Operator
[Operator Closing Remarks]
Duration: 34 minutes
Call participants:
Jason Willey -- Senior Director, Investor Relations and Corporate Development
Ran Bareket -- Vice President and Chief Financial Officer
Scott Keeney -- Co-Founder and Chief Executive Officer
Greg Palm -- Craig-Hallum -- Analyst
Mike Cikos -- Needham & Company -- Analyst
Andrew DeGasperi -- Berenberg -- Analyst
Thomas Diffely -- D.A. Davidson -- Analyst
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