MKS Instruments Inc

NASDAQ:MKSI

Earnings Call Transcript 2020-Q1

[Operator]

Ladies and gentlemen, thank you for standing by and welcome to today's program entitled MKS Instruments First Quarter of 2020 Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I'd now like to introduce to your host for today's program, David Ryzhik, Vice President of Investor Relations. Please go ahead, sir.

[David Ryzhik, VP IR]

Good morning, everyone. I'm David Ryzhik, Vice President of Investor Relations and I'm joined this morning by John Lee, our President and Chief Executive Officer; and Seth Bagshaw, our Senior Vice President and Chief Financial Officer.

Thank you for joining our earnings conference call. Yesterday after market closed, we released our financial results for the first quarter of 2020 which are posted to our website www.mksinst.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 the most recent Annual Report on Form 10-K for the Company. 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 non-GAAP financial measures, please refer to our press release for information regarding our non-GAAP financial results and a reconciliation of our GAAP and non-GAAP financial measures.

Now, I will turn the call over to John.

[John Lee, President & CEO]

Thanks, David. Good morning everyone and thank you for joining us today. In the last 90 days I cannot be more proud of the dedication, resilience and hard work of the MKS team during such a challenging time. I'd like to share a few thoughts on the COVID-19 crisis and how MKS responded.

Our first and foremost objective has been and continues to be the safety and well-being of our global workforce, which consists of more than 5,000 employees with offices and factories in 18 countries. Our second critical objective has been ensuring the continuity of our operations by swiftly responding to disruptions at our factories and supply chain partners. This included securing supplies of critical components, addressing rapid changes in workforce availability, and harnessing our global service footprint to respond to the repair and maintenance needs of our customers.

I'm proud to report we delivered quarterly revenue at the high end of our guidance range, even though our guidance has not factored in any impact from the COVID-19 pandemic. I would also like to mention that several of our products are being used to support the fight against COVID-19. We have often talked about how MKS provides critical enabling technologies for advanced processes. Our valves and pressure measurement solutions are used in the sterilization of personal protective equipment. Our optical filters are deployed in diagnostic systems for COVID-19 and our gradings are incorporated in blood analyzers.

Finally, something that gives me the greatest pride is how we engage with our communities in this time of need. In addition to donating masks and other personal protective equipment to hospitals, we established an employee matching program with the united way to help local communities in which our employees live. And as a credit to the innovation and ingenuity of our workforce, some of our US and Mexico employees took it upon themselves to use 3D printing to fabricate relief straps or face shields. We endorse and applaud these initiatives. We will continue to find ways to support our communities and the tireless healthcare workers on the front lines of this global pandemic.

Now, I'd like to turn to discuss our first quarter results in more detail. We delivered first quarter revenue of $536 million at the high end of our guidance range. Non-GAAP net earnings for the first quarter were $85 million or $1.54 per diluted share, which was above the high end of our guidance range. Sales to our semiconductor market further strengthened in the first quarter driven by broad-based demand from our OEM equipment and end-user customers. Despite factory and supply chain disruptions throughout the quarter, we continue to meet our customers' needs. We continue to see strong order rates in the second quarter. However, shelf in place directives in effects around the world are impacting some of our facilities as well as those in our supply chain to varying degrees.

We saw strong demand for our Power Solutions portfolio driven by multiple customers across both, conductor and dielectric etch applications. Our Power Solutions business remains one of our key growth drivers within our semiconductor end-market, and we will continue to take advantage of new opportunities where we can serve as a critical technology enabler. We continue to see increased adoption of our Ozone Solutions for Atomic Layer Deposition, serving both logic and memory manufacturing. We believe our Ozone systems are the preferred solution in leading edge foundry applications. Our market leading Remote Plasma Source portfolio had another solid quarter, securing several wins in advanced deposition processes.

In our advanced markets, we are encouraged with the stability in our first quarter revenue even amid the global disruptions. In fact, we anticipate revenue from our advanced markets to remain stable in the second quarter. We were pleased with the solid demand in our industrial markets led by electronic thin film and PCB drilling applications. We also secured several design wins for our lasers and advanced electronics manufacturer, which is a key growth driver for our advanced markets. Excluding our research market which was negatively impacted by university and research lab closures caused by COVID-19, our advanced markets revenue would have grown on a sequential basis.

Revenue from our equipment and solutions division exceeded our expectations, driven by strong demand for our Flex-PCB via drilling solutions. We remain very positive about the long-term opportunity in Flex-PCB as we expect it's increasing usage in electronic devices to accelerate key secular trends such as 5G and Internet-of-Things. In addition to serving the capacity needs of our PCB customers, we're also a key technology enabler, a complex transitions to denser PCBs using smaller vias as well as new materials. We are also excited about the opportunity that our new high-density interconnect drilling solution presents, which boasts an attractive cost of ownership advantage comprised of industry-leading throughput and significant weight and footprint savings. Interest in our HDI tool continues to grow. We continue working with our beta customers in qualifying our solution. We recognize there is significant market uncertainty as the global economy absorbs the impact of the COVID-19 pandemic, however, as I look out beyond the near-term uncertainty, I remain very optimistic about three important secular trends driving long-term growth in our semiconductor and advanced markets.

First, the rise of the daily economy increases demand for advanced memory and logic chips, thus driving long-term growth in semiconductor manufacturing capacity. Second, the increasing complexity of technology transitions in semiconductor manufacturing offers continued opportunities for share gain that favor companies with a broad portfolio of critical technology solutions. Third, the accelerating need for laser-based precision manufacturing requires a complementary offering of lasers, optics, motion and optical subsystems and MKS is uniquely positioned to provide integrated solutions. Our broad and differentiated portfolio, relentless focus on innovation and customer experience and world-class operational execution positions us as a key beneficiary of those secular trends and drive continued outperformance in the markets we serve.

And now I'll turn the call over to Seth.

[Seth Bagshaw, SVP & CFO]

Thank you, John. I will first cover our Q1 results and provide additional detail on our second quarter guidance. Sales for the first quarter were $536 million, up 7% sequentially and $16 million above the midpoint of our guidance. Semiconductor sales $313 million, up 15% sequentially reflecting strong industry fundamentals, as our end customers increased equipment spending. Sales to our Advanced Markets with $223 million, a slight decrease of 2% sequentially. We are pleased with the results within our Advanced Markets given the unforeseen headwinds we saw in the first quarter, caused by the COVID-19 pandemic.

Within our advanced markets, revenue from industrial life & health science and defense markets collectively grew on a sequential basis, however, our research market was definitely impacted by the widespread university and research lab shutdowns due to the pandemic, which led to the overall sequential decrease of revenue within our advanced markets. For the quarter, the revenue split between our semiconductor and advanced markets was 58% and 42% respectively. First quarter gross margin was 44.7%, a sequential increase of 140 basis points and 70 basis points above the midpoint of our guidance range. Gross margins in the quarter benefit from higher sales volume and product mix.

Non-GAAP operating expenses were $130 million, also favorable to midpoint of our guidance range, reflecting a continued focus on cost control, even given higher revenue volumes. First quarter non-GAAP operating margin was 20.5%, a sequential increase of 210 basis points and 190 basis points favorable to the midpoint of our guidance, which highlights our core competency in managing our business for sustainable and profitable growth while driving strong operating leverage in our financial model.

Non-GAAP net interest expense for the first quarter was $7.3 million and our non-GAAP tax rate was 17%. Non-GAAP net earnings for the first quarter were $85 million or $1.54 per diluted share. In the first quarter, revenue from equipment solutions division was $51 million, a sequential increase of 18% driven by stronger demand from our flex-PCB via drilling solutions. We are also pleased with increase in equipment solutions gross margin which grew to 45.6% in the first quarter, driven by product mix in higher volume. The integration of the ESI acquisition is substantially complete and in this quarter we are also pleased to announce we have reached our previously announced annualized cost synergies target of $15 million achieving this goal within 14 months of the acquisition, well ahead of our original time estimate of 18 to 36 months post acquisition. We continue to seek additional opportunities to drive profit improvements across the entire company on a continual basis.

Now turning to the balance sheet. Actually, in the first quarter, we maintained a strong balance sheet liquidity with cash and short-term investments of $503 million and $100 million of incremental borrowing capacity under an asset base line of credit, subject to certain borrowing base requirements. During the quarter, we completed a $50 million voluntary principal prepayment and the balance of our term loan was $840 million at the end of the quarter. Our net leverage ratio further decrease in the quarter was 0.8 times highlighting our ability to generate strong cash flow. Schedule term loan payments for the next 12 months totaled $9 million and our term loan with insurance [ph] in February of 2026 does not contain financial maintenance covenants. Also in the first quarter, we made a dividend payment of $11 million or $0.20 per share. In terms of working capital, day sales outstanding was 65 days at the end of the first quarter compared to 62 days at the end of the fourth quarter and inventory turns was 2.5x, it was consistent with the fourth quarter. Free cash flow for the quarter was $65 million, included $10 million of capital expenditures.

Now, I'll turn to our second-quarter outlook. Our order rates remain strong, driven by semiconductor market over the manufacturing service capacity of certain of our facilities in supply chain partners remain constrained to the shelter-in-place directives around the world. Although we incorporate our best assessments in the financial impact of these factors, the time extent of these widespread shelter-in-place directives will depend on a number of factors in government actions. As a result of these factors, we estimate that our sales in the second quarter could range from $450 million to $520 million. Based upon current business levels and absent COVID-19 constraints, we estimate our second quarter revenue would likely be at least consistent with first quarter levels. We estimate our non-GAAP growth margin could range from 42.5% to 44.5% reflecting anticipated product mix in global shelter-in-place directives impacting capacity.

Second quarter non-GAAP operating expenses could range from $124 million to $132 million, R&D expenses could range from $41.5 million to $44.5 million, and SG&A expenses could range of $82.5 million to $87.5 million. While we are estimating a sequential decline in revenue, our order rates remain healthy and as such, we do not expect specific reduction in operating expenses in the second quarter. Non-GAAP net use expense expected to be approximately $6.7 million dollars and a non-GAAP tax rate expected to be approximately 17%. Given these assumptions first quarter non-GAAP net earnings could range from $50 million to $77 million or $0.90 to $1.38 per diluted share.

I'd like to now turn the call back to the operator for Q&A.

[Operator]

[Operator Instructions] Our first question comes from the line of Krish Sankar from Cowen & Company. Your question please.

[Krish Sankar, Cowen & Company]

Yes, hi, thanks for taking my question. I had a couple of them. First one, John said, thanks for giving the color. It looks like a $50 million reduction of the midpoint in revenue, you said that was all due to COVID in Q2 versus Q1. And it seems like it's all coming in the semiconductor side, what is the main difference in the supply chain between semi and advanced markets that semi is more impacted than advanced markets?

[John Lee, President & CEO]

Yes, Krish. I think a portion of the $50 million is still in Advanced Markets and the biggest driver there is the closures of universities that are non-essential kind of businesses for us to ship our materials to our products too. So there's still a portion of that of the $50 million that is driven by advanced markets and that's driven by these closures. In semi, I think it's really about a regional filter in place directives and the uncertainty of when and how much of those shelter-in-place directive will mitigate over time. And just like with everybody else in this in the semiconductor market, we have suppliers in countries like Malaysia and Singapore, as well as Mexico. And so those are the main countries right now that we are most concerned with but things can change rapidly and that's why we're offering this kind of a guidance going forward.

[Krish Sankar, Cowen & Company]

Got it, John. And then two other quick questions. You said that the demand has been pretty strong and you're more supply constrained, kind of, it seems in sync with what your customer like Lam also said last week, but there was a general view that the downstream demand might slow down in the second half of the year. So if that does happen, but it looks like in Q2, you are under shipping demand, so is it fair to assume, even if downstream demand falls in Q3, a little bit of the catch-up supply would make it not that bad for you folks in Q3?

[John Lee, President & CEO]

That could be the case, Krish. But we certainly don't have great visibility like everybody else in terms of any kind of demand destruction. We know now that so we have strong order rates in Q1 and Q2 and we have supply constraints and we will try very hard obviously as we've demonstrated in Q1 to deliver to everything that our customers' needs and that's why the range is a little wider and we have every day solving supply constraints, every day new supply constraints come up and so we expect to do before 85 [ph] but there's a lot of uncertainty there and we will always try to overachieve that.

[Krish Sankar, Cowen & Company]

Got it. And then a final question, John, is on the Light and Motion, I guess legacy Newport business even pre-COVID, it was not expected to rebound anytime until later this year. Do you think that recovery has been pushed out due to COVID or it doesn't really change because that has been running at a pretty low run rate?

[John Lee, President & CEO]

Yes, you know it's hard for us to tell if it's COVID related. Right now, it seems to be very consistent to what we saw in the most of 2019 where a lot of it was tariffs and trade war issues. So right now, I think it's really still similar kinds of behavior drivers.

[Krish Sankar, Cowen & Company]

Got it, thanks, John.

[John Lee, President & CEO]

Thanks, Krish.

[Operator]

Thank you. Our next question comes from the line of Patrick Ho from Stifel. Your question please.

[Patrick Ho, Stifel]

Thank you very much and hope all is well, and congrats on the really nice quarter. John maybe first off, in terms of the variables, you've talked about the supply constraints affecting revenues for the June quarter. From a margin perspective, you have issues like the supply chain manufacturing utilization and even logistics, can you give a little bit of color of how that affects margins of both near term and when you believe you could start mitigating some of those issues from a bigger picture perspective?

[Seth Bagshaw, SVP & CFO]

Yes, this is Seth. I'll take that question. So, you're right. In the first quarter, we had margin of 44.7% which is about, what do you expect to these volumes, maybe a little favorable to product mix. We mentioned ESI had a strong quarter as well. The margins in that group, close to 46%, 45.6%. So we gave the guidance or the second quarter at a 45% midpoint. There [indiscernible] between Q1 and Q2 is we'll have lower production volumes. And I believe that really drives fundamentally about a point differential in the guidance gross margin rate, so get back up to the 535 rate I think that'll normalize pretty quickly. There is a certainly real delta between Q1 and Q2 in the margins fundamentally.

[Patrick Ho, Stifel]

Great, Seth. That's really helpful. And maybe as my follow-up question in terms of the ESI business. You talked about the PCB, the Flex-PCB business picking up. Can you give us an update about your HDI efforts and what you're seeing there in terms of some of the valuations that you've talked about in the past. And when you could start recognizing some more meaningful revenues?

[John Lee, President & CEO]

Yes. Patrick, it's John. So we continue to have further increases in the number of peers [ph] and beta sites, but really the goal this year is to obtain design wins, qualify our tool, various processes with our customers. So that's what we're really focused on. And so I think it's really from a substantial revenue standpoint, it's really a 2021 story.

[Patrick Ho, Stifel]

Great, thank you very much.

[John Lee, President & CEO]

Thanks, Patrick.

[Operator]

Thank you. Our next question comes from the line of Tom Diffely from DA Davidson. Your question please.

[Tom Diffely, D.A. Davidson]

Yes, good morning. So John, when you talked about the supply constraints. I'm just curious, is the bigger impact on new supply for your products, creating your products or is it the supply constraints your OEM customers have in their channels?

[John Lee, President & CEO]

Well, I can't comment on what our OEM customers constraints are, I can certainly say that in Q1 as you can tell from our numbers MKS was not a constraints, for any of our customers, we believe that and as you know our customers are not shy about telling us that we are. So I'd say if they have the supply constraints as some of our OEM customers have said, are perhaps is in other parts of their supply chain.

[Tom Diffely, D.A. Davidson]

All right. I was just wondering if the timing of what your customers are asking for, had a bigger impact versus your ability to supply them with what they need it?

[John Lee, President & CEO]

No, I think our customers have ordered strong order rates as we talked about, been able to meet those demands in the first quarter. I think we will also be able to meet them In the second quarter. It's just that we have some supply constraints. And so, we work very closely with our customers to make sure that we keep them hold and prioritize their shipments as well. So I don't believe we'll have any kind of constraints to our customers in Q2, given the volume of the material that we can get through our factories.

[Tom Diffely, D.A. Davidson]

Okay. And then when you look at the ESI business, you talked about the flex getting stronger. Is that driven by capacity needs as the market had basically absorbed all the capacity, put in place a couple of years ago or is this driven by technology purchases for 5G in the roll later this year?

[John Lee, President & CEO]

This is really a bit of both. There is capacity additions for sure, and that's why the numbers are as good as they are. Some of it is used for 5G, but we really can't differentiate sometimes, how much of it is used for 5G versus making the regular non-5G phones.

[Tom Diffely, D.A. Davidson]

Okay, thank you.

[Operator]

Thank you. Our next question comes from the line of Sidney Ho from Deutsche Bank. Your question please.

[Sidney Ho, Deutsche Bank]

Great, thanks for taking my question. A couple of them. First one is, when you gave guidance last quarter you had expected, no impact from the Corona virus yet your semi business seems to have done extremely well even with the shutdowns and travel restrictions and supply constraints and whatnot. How would you describe this upside in Q1, was that driven by a certain in-customers, regions, do you think is some sort of pull in of demand from Q2 because of whatever is going on with the virus and was the logistics even an issue at all in the quarter?

[John Lee, President & CEO]

Yes, I would say Sidney, that the order rates for strong in the beginning of the quarter, they were already increasing in Q4. So I don't think it was any kind of different behavior from our customers in terms of the strong order rate. I think we did deliver to the high end of a non-Coronavirus affected guidance range and that doesn't mean we didn't have challenges as we talked about. We had lots of challenges. As you know, we have factories in China, we have factories in Singapore, we have factories in Europe, factories in Mexico, factories in the United States and all of them, almost all of them had some kind of impact. And then of course, our suppliers are all in those region. So I think it's just a testament to our operational capability and our supply chain management to whether all those challenges happened in February in China, as you know. And then it spread to Europe and other countries in March. And so I think we just delivered a lot better and executed a lot better than maybe some of our peers.

[Sidney Ho, Deutsche Bank]

Okay, that's helpful. I know you're not ready to guide for second half yet given the supply chain uncertainties. But if those issues somehow resolved, let's say, by the end of this quarter, how are you thinking about the full year the WFE market given the order book seems to be quite healthy. And do you feel comfortable that you still outgrowth that debt market this year. What does WFE ends up to be?

[John Lee, President & CEO]

Yes. So, obviously, we have no crystal ball in terms of the second half and I think it will really be determined by the chip manufacturers and then will be determined by kind of what the consumer demand is and industry demand is, so I don't think we can really comment on what the second half will be. All we know is that our order rates are strong in Q1 and Q2 remain strong and we will make sure that we deliver to those order rates.

[Sidney Ho, Deutsche Bank]

Okay. Maybe on the advanced market if I back out the ESI side obviously does pretty good. The revenue from the non-ESI area, it's about a quarter, lower than what it was two years ago in fact it sounds like you guys feel pretty comfortable that it's just going to be consistent in Q2. Is that the right level for which we start thinking about the business is not growing at the more normalized rate from here on out?

[John Lee, President & CEO]

Yes. I think that is probably the right way to think about Sidney, given that I don't see any changes in kind of the constraints that happened before and some of those constraints were trade war issues, those seem to still be there. And then research of course is going to continue, we believe to be limited in terms of when they can open, some of the universities and research labs, they can't open, they can't take product from us lasers and optical components, if they're not open grad students on ordering online or optical components from our website, et cetera. So there is still significant noticeable component, as I said to Krish. So probably 20% of that $50 million lower revenue in Q2 is probably because of research.

[Sidney Ho, Deutsche Bank]

Okay, that's fair. Maybe one last one, I'll go away. In terms of use of cash, you have a history of early pay down [indiscernible] debt and may be negotiating for lower interest rate and given the uncertainty we are facing, what is your priority of cash right now and operationally are you building inventory for the anticipated increase in demand in the second half.

[Seth Bagshaw, SVP & CFO]

Yes. So I'll take that, Sidney. So, yes, obviously long-term approach on cap allocation acquisitions. It give them is putting as well and then paying down debt, I think you had pretty effective job negotiating new rates as the market allows us. So I think in the intermediate term, your next quarter or two, our view there would be kind of continue to have marshall [ph] cash on the balance sheet just give uncertainty in the marketplace. If things change. I think we'll get back to looking at paying down debt in the future. I think certainly right now through Q2, our goal will be kind of March and cash on the balance sheet.

[Sidney Ho, Deutsche Bank]

Okay, great, thanks.

[Operator]

Thank you. Our next question comes from the line of Amanda Scarnati from Citi. Your question please.

[Amanda Scarnati, Citi]

Hi, good morning. The first question is more on the advanced market side of the business, there is expectations that smartphones could be down about 10% to 20% this year. Can you just talk about how that would impact your Advanced Markets business or is this more of a '21 story for you. So what happens in '20 isn't necessarily as big of an impact? And can you just talk about what that looks like?

[John Lee, President & CEO]

Yes, Amanda, it's John. So it's a little difficult, because even if smartphones does go down as you say, by 10%, given the whole supply chain of customers that we have that our supply of those phones and just depending on their capacity who wins that particular contract they could be ordering lasers to build more tools, or they could be ordering more ESI, PCB drilling tools. So it's actually a little hard for us to quantify how much of a downtick it might affect MKS, generally overall on average, obviously, capacity will be lower, needed capacity will be lower. But in terms of how it affects us will really depend on which one of our customers wins and which ones don't.

[Amanda Scarnati, Citi]

Great. And then this is a little bit new, but I know that the U.S. Commerce Department came out with the new rules on Monday that would require licenses to ship anything to China, starting at the end of June. Can you just talk about what impact that could have on MKS or any information that you might have in terms of what those licenses might look like?

[John Lee, President & CEO]

Yes, Amanda. That's a good question. Yes, it did come out yesterday, I guess. So we're evaluating it now, and it's probably a little too early to tell how much of an impact, if any, will have on MKS. I would like to point out though that we already do this, a process. We already have products that have to go through export control, and we know the path. We know the government agencies that regulated. And so really the question now is how many other customers, I guess, will be on that list. And we have to have export control. So I think we're still in the evaluation phase. Still early days there, Amanda.

[Amanda Scarnati, Citi]

Great, thank you.

[John Lee, President & CEO]

Thank you, Amanda.

[Operator]

Thank you. Our next question comes from the line of Mark Miller from Benchmark. Your question, please.

[Mark Miller, Benchmark Company]

Thank you for the question. As just noted, the smartphones are supposed to be weak due to the virus. But at the same time, in terms of memory and logic chip demand, this has been more than offset by data centre growth. Some of that's due to more at-home work and schooling. But Intel cast some concerns during their conference call where they were saying that that's been very strong and expected to be strong this quarter, but there could be some slowing in data centre demand later this year. So I'm just wondering, what are your feelings about that? And also in terms of the 5G ramp, do you really see that coming on very strong in the second here for the year?

[John Lee, President & CEO]

Mark, this is John. Well, I think we certainly have long-term views of data centre and data economy-driven demands for some [indiscernible] as well as 5G-driven demands for not just the chips, but also the laser manufacturing processes. So I think I would say that long term, we're still very, very bullish on data, data economy, and the need for 5G phones. I think we certainly don't have a crystal ball in terms of what might happen or might or might not happen in the second half with respect to those. I don't think we have any more visibility than Intel does, or a Samsung, or Apple. So I think longer term, those are the messages I'd like to emphasize. Those are great long-term drivers for us.

[Mark Miller, Benchmark Company]

Similarly, in terms of laser demand, lasers typically thrive or dive on the global industrial output, and I'm just wondering what your thoughts are there, especially with concerns about a contraction of global economy.

[John Lee, President & CEO]

Mark, I think that's generally true. I think when your lasers are focused on industrial manufacturing, but some of -- as we've talked about in the past, our lasers are really focused on new processes, new enabling processes in new types of products. And so, I think it's a little decoupled from just general industrial GDP, and that's what we've seen in the past and we hope to see in the future.

[Mark Miller, Benchmark Company]

And then finally, just a housekeeping issue. Could you supply the revenue breakout for light and motion and vacuum analysis?

[John Lee, President & CEO]

So for Q1, V&A was $320 million, light and motion, $165 million for the quarter, and E&S was $51 million.

[Mark Miller, Benchmark Company]

Thank you.

[John Lee, President & CEO]

Thanks, Mark.

[Operator]

Thank you. [Operator Instructions] And this does conclude the question-and-answer session of today's program. I would like to hand the program back to John Lee for any further remarks.

[John Lee, President & CEO]

Thank you. I'm extremely proud of the dedication and resilience of our employees around the world. They have overcome an unprecedented number of challenges, never before seen in our lifetimes, in order to deliver on our commitments, while keeping each other safe helping our communities. It is ironic that after implementing the required social distancing practices, we have become even closer as members of the global team. Thank you for joining us today and for your interest in MKS.

[Operator]

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.