Executives: Temi Oduozor - Principal Accounting Officer and Corporate Controller John Regazzi - Co-CEO, CTO & Director Suresh Nair - Co-CEO & VP of Operations

Analysts: Frank Barresi - Analyst

Operator: Welcome to the Giga-tronics First Quarter Earnings Conference Call. My name is Karen. I will be your operator for today's call. [Operator Instructions]. Please note that this conference is being recorded. I will now turn the call over to Temi Oduozor. Temi, you may begin.

Temi Oduozor: Thank you. Hello, everyone, and thanks for joining our quarterly earnings conference call. I'm Temi Oduozor, and I'm joined today by our co-CEOs, John Regazzi and the Suresh Nair. Before we begin, I need to remind everyone that this conference call contains forward-looking statements concerning operational performance, future orders, long-term growth and shipments. Actual results may differ significantly due to risks and uncertainties associated and uncertainties, such as delays with manufacturing and orders for our new ASG, receipt of timing for future orders, cancellation or deferrals of existing orders, company's potential need for additional financing, ability to be traded on NASDAQ, uncertainty as to the company's ability to continue as a going concern, the volatility in the stock market price and the stock price of our common stocks, results of pending or threatened litigation and general market conditions. For further discussions, see our most recent annual Form 10-K for the fiscal year ended March 25, 2017, Part I, under the heading Risk Factors and Part II, under the heading Management Discussion and Analysis of Financial Conditions and Results of Operations. With those reminders, I'll now pass the call on to John. John?

John Regazzi: Thank you, Temi. Good afternoon, and thank you for joining our Q1 quarterly earnings conference call. Today, the company is reporting net sales of $2 million for its first fiscal quarter ended June 24, 2018, a 41% decrease as compared to $3.4 million for the first quarter of the prior year. Although this figure is higher than the forecast given in the previous earnings call of between $1.3 million and $1.7 million, it's well below our target revenue. ASG product sales were $200,000 at the first quarter of fiscal 2018 versus $674,000 recorded in the first fiscal quarter of the prior year. This decrease was primarily due to a delay in receipt of several expected orders from the U.S. Navy for the company's multi-ship RADAR signal generator system. These decreases were partially offset by a $377,000 increase in net sales from the company's Microsource business units from $1.3 million in fiscal 2017 to $1.7 million in Q1 of fiscal 2018, primarily due to an increase of RADAR filters shipments. This produced a net loss for the quarter of $1.3 million, or $0.13 per fully diluted common share compared to a net loss of $102,000, or $0.01 per fully diluted common share in fiscal Q1 of last year. However, bear in mind that the net loss figures for Q1 of last year included a gain of $802,000 associated with the company's sale of the Switch product line. Because we weren't exactly sure about the timing and of the receipt of the ASG orders, we entered into a loan agreement with Partners for Growth. If you follow the company closely, you will know that this is our second loan with PFG. The initial loan was paid off in fiscal year 2017. Unfortunately, at the end of the quarter, due to lower-than-anticipated revenues, we were not in compliance with the revenue and shareholder's equity covenants associated with that loan. We continue to work with PFG to rectify the noncompliance. On August 2, we entered into a short-term forbearance agreement with PFG. We will continue to work with PFG would during the remainder of the forbearance period in order to rectify the noncompliance by the end of the forbearance period. Although the company experienced delays with ASG product orders in the first quarter of fiscal 2018, I'm pleased to announce we received the first of several expected orders -- follow-on orders from the United States Navy, worth $1.7 million, for our Real-Time Threat Emulation System. This particular system will be installed at the company's facilities in Dublin, California for the expressed purpose of supporting installations at Point Mugu and in Baltimore, Maryland. Operational issues discovered while using our system in classified environment where access is limited can be more easily duplicated and resolved at the company's facilities in Dublin. This makes it clear the U.S. Navy is committed to our solution for their advanced EW testing requirements. The company expects to fulfill this order for the support system within the current fiscal year. In addition to the recent ASP product orders, we also received one of several expected follow-on orders for the additional RADAR filters. This order is for the F-18 program, worth about $500,000, which we anticipate will continue -- orders will continue. Additional orders are also expected soon for the F-15 upgrade program. With that, I'd like to open the call for questions.

Operator: [Operator Instructions]. And we do have our first question from Frank Barresi.

Frank Barresi: Okay. So you said that the -- you didn't anticipate this order being fulfilled until -- you said just -- all you said was during the current calendar year. So you don't think it'll -- this isn't something that you'll be delivering immediately or finishing immediately?

John Regazzi: So yes, Frank, I was being conservative in my comments there. We believe we can ship it by -- we're not sure we can get it done in the current quarter, but we're trying to do so. There are some long lead parts that we had to buy. However, we expect for sure we can deliver it in the October time frame. But let me stop and ask my partner here, Suresh Nair, if he wants to modify what I just said.

Suresh Nair: No, John, I think you're right on. We are trying to pull the parts in this quarter, but it's most likely because there is a long customer-facing ATP that we have to run. So we believe that our best-case scenario will be to deliver the product to the customer in October.

Frank Barresi: Of course, you have to run a customer-facing ATP?

Suresh Nair: Correct.

Frank Barresi: And ATP is...

Suresh Nair: It's just a test procedure that we run when the customer is on-site to validate that it looks good.

John Regazzi: It's an acceptance test procedure. So they go through a checklist. It's a government purchase, so they have to make sure they're receiving what they purchased.

Frank Barresi: So this will be the -- on this Navy -- what comes from the Navy. This will be the next -- this is the next order, basically. They have -- do they just have one system in Point Mugu or...

John Regazzi: Currently, that's correct. And the second system is at the prime contractor for the device being tested in Baltimore, Maryland.

Frank Barresi: Okay. And you're expecting more orders this year for this application?

John Regazzi: Yes, we are. So the first 2 systems we delivered in the December, I think we delivered them in the fourth quarter of fiscal '17. And one of the systems went to Point Magu at the Navy base, and another one -- the system is testing an electronic warfare device that goes aboard the F-18 program -- of airplane. And the prime contractor on that device is Northrop Grumman in Baltimore, Maryland. So a second system was purchased and shipped to Baltimore. And the third system is the one we just mentioned receiving the order for. That's going to be sitting in Dublin at the company's facility in Dublin, California for the express purpose of being able to support the Navy and Northrop Grumman. So if they find a problem, it's not so easy to get into the classified environment. So we have a duplicate system here that we could troubleshoot whatever problem they're finding and then provide a solution. In addition to that, the Navy facilities in -- at China Lake and at Pax River, Patuxent River, Maryland, we also expect to receive orders for the same systems that will be installed there. And we expect at least those 2 by the end of the -- I don't know if it's at the end of the calendar year, I think, is what we expect. Hopefully, we can deliver those by the end of our fiscal year. And it may be the Point Mugu will get a second system. I'm not sure, but we expect several more of these very same orders, they'll be in the same price range, $1.8 million -- $1.7 million, $1.8 million. There's at least 3 more that we see.

Frank Barresi: Okay. And you hope to deliver those this fiscal year?

John Regazzi: Well, I hope to deliver maybe 2 of those 3 this fiscal year. The timing of the third order, I'm not as clear on this. The timing of this -- the next 2 is more certain.

Frank Barresi: And the next two, forgive me, is the China Lake and Pax River would be the next 2, you think?

John Regazzi: Correct, correct.

Frank Barresi: Okay. And so you would expect those to be fairly soon and there might be another one coming in for, I believe, you said, another additional system at Point Mugu?

John Regazzi: Right. I mean, the -- there's such a backlog of testing. Testing is complex and takes a long time. And you end up getting a large backlog. Nobody can get enough time on the system. So my guess -- I'm guessing a little bit here that Point Mugu will end up installing a second system sometime down the road, but I'm not as positive of the timing of that one. But I do know that Point Mugu and Pax River are contemplating a purchase this year.

Frank Barresi: Okay. And then what about other prospects for the system. I mean, that's nice to have, but we're -- I mean, in order to make it -- well, you need a lot more orders, correct?

John Regazzi: We need steady orders, and I don't believe they're going to be coming from this particular system alone. What I've heard discussed at the Navy is that they're standardizing around this, and then this will be used with other electronic warfare devices. But right now, it's being deployed for the specific one that goes on the F-18. And it may end up -- we believe this is true because they're telling us this, they're standardizing on it for this particular type of testing and they'll -- it's expected that they'll need more orders, but that won't be this year. It'll be a year -- it'll be next year that they'll be looking at that. And it's not the only business that we're looking at. There's other Hydra ASG product orders that we expect to receive from other prime contractors, BAE in Nashua, New Hampshire and Lockheed Martin in Dallas-Fort Worth and other facilities of Raytheon around the country. So it's not the only -- we're not only focused on the strict emulation system. It just happens to be the one that we're getting the orders for right now.

Frank Barresi: Okay. And are these all related to the F-18, these orders? Are some of them for the Air Force or the prospects, I mean?

John Regazzi: Right now, this is all Navy business and it's all F-18. And it's not related to the -- I mean, it's the same airplane that we sell the RADAR filters to, but this is for testing the EW equipment that's on board -- on board that airplane, and that's Navy.

Frank Barresi: So you're saying they're looking to standardize a certain type of testing with the ASG -- for the ASG because it's like you are saying when you first started this project, it's superior to the methods they have available -- the other methods they have available?

John Regazzi: Well, the other methods they have are -- the systems are very large and they're time-shared. The analogy I can give you it's like the old days of sharing computing time on an IBM PC -- sorry, on an IBM mainframe and the ASG is like having your own PC on your desk. You don't have to share it. And it's sort -- the paradigm shift of getting this kind of testing capability more widely available than having to share a very large system among a number of projects.

Frank Barresi: Okay. And my concern, of course, is you need so much -- I mean, in order to be profitable, the company will need quite a bit of volume. I mean, what level of sales volume are you going to need?

John Regazzi: Temi, do you want to take a stab at that or...?

Temi Oduozor: So Frank, we were currently thinking about -- if we can get in orders of about $1 million every month, that would definitely get us close to where we need to be.

Frank Barresi: $1 million a month. So $12 million a year of total revenue is what you're talking about?

Temi Oduozor: No, just for Hydra.

Frank Barresi: Just for Hydra. Okay, $12 million of Hydra. And if you get 3 orders the balance this year -- I mean, if you could deliver those, that would be 5 -- so, okay. And there's prospects, I guess, but those would be for other instruments on the airplane besides whatever you're testing now, so -- and I guess, you're working on those orders now, John, or...?

John Regazzi: You mean the other orders besides these, besides the Navy orders?

Frank Barresi: Right, right. Yes...

John Regazzi: Of course, so the answer is yes. And we've got active projects in a number of locations. So the -- of course, the customers don't tell us everything about what they're doing, but BAE and New Hampshire, they're the supplier of the electronic warfare equipment on board the F-35. And so they're looking at our up and down converter, and we're working with them trying to define a system that will include our ASG hardware, probably some of the software that we contracted for, and we expect to receive some of those orders as well this year.

Frank Barresi: That would nice because the F-35 will take a lot more equipment to test it, won't it? Or will it? I don't...

John Regazzi: Yes, every effort we put in, we try to learn more and more about the uses of the equipment and get more about understanding the market and how many -- where the opportunities are and how big they are. So we constantly are adding to our knowledge of the space. Our new VP of Sales and Marketing, Jim Taber, is doing that research for us. He brings a lot of knowledge already from his past work in the past in other companies, and he's continuing that effort here with -- at Giga-tronics. And so we're just constantly adding to our knowledge about the markets. So I would agree with you. The F-35 seems like it would absorb a lot of test equipment being the major program and the DOD at the moment.

Frank Barresi: So you see the business as being there. It's just how do you bridge this period of needing additional capital?

Temi Oduozor: That's correct, Frank. And I believe, we had announced in a prior earnings release that we are looking at strategic alternatives that we're actively pursuing what we need to pursue to be able to make sure that we get to where we need to be.

Frank Barresi: So what kind -- you're pursuing, say that again, Temi, I didn't catch that.

Temi Oduozor: In a prior release, we have mentioned that the board is looking for alternatives. While the board hasn't decided what those will be, I can assure you that we're looking at single alternatives that is available to us.

Frank Barresi: Okay, that you'll need to -- I mean, because there's not a prospect for immediate, I mean -- well, I guess, if you get orders, you can probably ship them -- I don't know if you can ship them by the end of -- is there any possibility of orders developing immediately, John? Let me ask you that. I mean, an additional...

John Regazzi: Well, there's always some -- we're not aware of anything that's going to come in like tomorrow. Although we are expecting, if I go -- if I switch to the Microsource side of the business, we are expecting additional RADAR filters very soon. I can't tell you if it's this month. I mean, these things just take time, but I know they're going to happen. So the additional orders I mentioned on the F-15, that's a very large -- it's a multiyear contract that we're negotiating right now, the Ds and Cs. I know that the customer needs those RADAR filters. And so there's pressure to get this negotiation finished and get us the orders. So we have other -- we have those things expecting to come in. And the other thing I would remind you is that -- the order that we got from Point Mugu, it comes with progress payments. So I don't have to wait till I ship the whole thing and get the money. I mean, we get cash up front, we get cash every -- from different things. So we also mentioned last time that we reduced work hours to try to conserve our cash. And so we are managing through this period and we're also -- as Temi said, looking at other options all the time, but we believe we can manage through this period. Frank, one thing I might -- I don't want to cut you off, Frank, but I wondered if anybody has some questions. We get back -- we can get back to you, if there are. If there are any other questions, you can pick up again. Thank you, Frank.

Operator: [Operator Instructions]. And we do have our next question from Eddie Zong [ph].

Unidentified Analyst: John, I just have a quick question for you. Looking at the last second quarter of Northrop Grumman, they're talking about a 72 AESA RADAR order upgrade for the U.S. National Guard F-16 upgrade program. Is that -- can you give us more color on that, please?

John Regazzi: Well, I'll try, Eddie. The F-16 is a fourth-generation fighter just like F-18, F-15 and that airplane was actually the most -- had sold the most number worldwide in almost any other airplane. Many countries own this version -- this type of aircraft. And many of them are looking to modernize the airplane to get more life out of it. And one of the first things that people do is they put an upgraded RADAR on the plane. If you only upgrade the RADAR and you don't upgrade any of the other electronics on board the plane, there can be an interference problem develops between the new RADAR and all the old equipment. And so the RADAR filter that the Microsource division makes solves this interference problem. And so the same thing happened on the F-18, the same thing on the F-15. The Taiwanese are the owners of F-16s that are furthest along. We're selling them filters to solve the problem as they upgrade. South Korea is in progress of upgrading their airplane, and we expect we're going to be selling filters to South Korea. And we're not exactly sure which country is going to be the next one in line. It could be Singapore. It could be one of the Middle Eastern countries. It might even be the United States. And we have heard that the National Guard are looking to upgrade their airplanes. So those are not -- the United States Air Force has the largest single volume of airplanes. They probably have 1,000 planes. South Korea had 100. Taiwan has 100. The National Guard may be the first to do the upgrade. What I do not know is whether the National Guard will upgrade all of their electronics and, therefore, not need a filter. So those upgrades will be conducted out of -- we believe, out of Hill Air Force Base in Utah. And we've got people there working with the program office there to understand what are the engineering challenges, what are they going to do, are there any opportunities for us. So that could take 9 months to 1 year to develop into a real opportunity, but we're following that program carefully because there's a lot at stake for us in that. If they choose to upgrade all their electronics, there's probably nothing Giga-tronics can do to talk them out of it and get them to buy our filter, but we are trying to follow where the opportunities are and make sure they are aware that if they do have an interference problem that we have something to solve.

Unidentified Analyst: Okay, I just have one last question for you. Looking at the last proxy statement, they talked about a Proposal 4 and a Proposal 5, which is a reverse-split stock. From what I know, it all started in May 8 and the NASDAQ, they basically give the company 180 days, which is due by the end of next week. Are you -- can you give us more color on that?

John Regazzi: Yes, I'm going to ask our financial officer, Temi, to answer that question. She actually was in front of the NASDAQ hearing committee on hearing board on that. Temi, can you maybe address Eddie's question.

Temi Oduozor: Sure, John. Eddie, we did -- to John's point, we attended a meeting in June in front of the NASDAQ panel. NASDAQ decided to let us stay on and they gave certain conditions that we needed to meet. And we had to give them progress reports with the last progress report coming in. We gave them the first one at the end of July. We needed to provide another one at the end of August and by the end of September. So we're continuing to work with them. We did update them on our progress for -- as of the end of July, and we haven't heard back from them.

Unidentified Analyst: Okay, so basically, you're saying if they are not good with the results, they might take action and basically stop the timing?

Temi Oduozor: Well, our first progress report was actually tied into orders. We had told that we were going to get some orders and we were able to get those orders in. And that was a progress report that I gave to them. So I'm not sure what could happen, but I did submit the progress report as of the date that was required.

Unidentified Analyst: Okay. So you guys are basically waiting for very much a big order to come in, and resolve the problem momentarily, right? So I was thinking -- I was going to ask you since the international orders are divided in 3 big chunks and the last one is supposed to come in and even if it's not from South Korea or Singapore, it's already supposed to be in this quarter or it's going to be on the third quarter of 2018? Can you give us more color on that.

John Regazzi: Eddie, this is John. We expect the F-15 to come in this month. Next month, it's very soon. The South Korean order, we expect to get only a very small order for a number of units. They're going to install those units on the South Korean airplanes. And then they have to fly them around and test it. So I don't expect an order from South Korea this fiscal year is my guess. So Suresh, do you have any other information on that?

Suresh Nair: No, that's about right. We're getting the order to build a few number of what they call a slight test units and those will be build and shipped. They don't require it to the first quarter of calendar year next year, and they're going to fly it for a period of time before they come back to us for the subsequent orders.

John Regazzi: Right. So I would expect, Eddie, that we'd see the production order for the South Korean F-16s in fiscal '19. We've only gotten -- and quality engineering units or the prototype units. We're getting those orders now, but it's a limited -- limited quantity. Okay?

Operator: [Operator Instructions]. And it looks like we have no questions in queue. We actually just got Frank.

Frank Barresi: So John, did you say that you felt you're optimistic you would be able to like get through this current stretch? I mean -- I wasn't quite sure, but something you said that made me sound like you felt like you'd be able to...

Suresh Nair: John, do you want me to take that?

John Regazzi: Yes, maybe I'll let Suresh take that one. He's the one managing the operations.

Suresh Nair: Frank, it's Suresh again. And to answer your question, yes, absolutely. We have been taking significant actions over the past 3 months. And along with these orders that have come in and like John stated, the progress payments that we expect to get and aggressive approach of trying to get the units shipped out hopefully by the first to second week of October, I think we are very comfortable that we should be able to withstand the next few months.

Frank Barresi: Okay. Good, good. And the thing -- the F-35, as far as getting any business there, which would be incredible. That would take -- that's not something that's going to happen right away or anything. I mean, that -- I mean, because you have to develop some extra -- I don't know -- or does the system as it is now, would it work on the F-35? Or are there other developments you'd have to make to it, do you think or...?

Suresh Nair: Well, so Frank, let me say this, we have already sold units into BAE and we're working on them on a follow-on -- defining a follow-on system, and I believe that's got to be connected to the F-35, although I'm not exactly sure because I hear -- But I do know BAE is the supplier of the EW hardware on the F-35. Second point, we are selling units into Lockheed Martin, Dallas-Fort Worth, where the F-35 is actually being designed and produced. And I do know that we are getting requirements from that group about, can you add this feature or add that feature, so that it can be used on the F-35. So I know that we're already in support of that program. As you know, it's one of the largest engineering projects probably going on in the world, for sure, in the U.S. So it's not surprising that it's got tentacles everywhere and that we're getting involved in it. The F-35 relies on many of those very, very big systems that we've talked about in the past, the things that are equivalent to an IBM mainframe. And we're not competing in that space. But we are trying to bring this kind of test to the bench top like the IBM PC gave everybody a personal access to computing. Our system gives the individual engineer access to testing. It doesn't -- it's not the same as those very, very big systems, but it's good enough for engineers to get their work done on their bench, and it helps assure that when you finally test the end product on those large systems that you got a greater chance of success then if you hadn't had any opportunity to test until you got to the end. So that somewhat the value proposition that we're making and it's resonating with people and we're getting a lot of interest. It's government business. It takes a long time. You're talking about orders over $1 million. And so it just doesn't go through the system like a $10,000 order. So I think, what -- I think, what your -- go ahead, Frank.

Frank Barresi: Oh, well, and to get back to that, but -- so just going back briefly, The Navy, there's other applications besides the system you're testing now. There's other applications you're working on with Point Mugu?

John Regazzi: Yes.

Frank Barresi: So there's potentially more -- that would be -- which would probably -- at least some of them require additional systems at Point Mugu and at other contractors or maybe the same -- correct?

John Regazzi: Yes, that's correct.

Frank Barresi: Okay. So there's other potential with the Navy. And then, on -- well, you've got F-15 -- I don't know, if there's anybody, I guess, you wouldn't know if they're using it for the F-15 or some other...

John Regazzi: Well, I mean, we've got -- well, we've got a very close relationship with the prime contractor on the F-15. And we've discussed -- normally, they come to our facility and talk about RADAR filters, but while they were in the facility, we said, hey, we've got this ASG product line, maybe there's -- you could make use of that. And the answer came back absolutely. Now the guy I was talking to was not the guy that would be buying the ASGs, but he knows that his colleagues has a need for this kind of stuff and he's trying to get us an audience with that group, a different group inside of the same contractor. So every opportunity we get, we're trying to get in front of people that would need this product. And I should add that our new VP of Sales and Marketing is doing a lot to try to get more awareness -- general awareness of our product out there. So every month, he's getting -- we're going to be on the front page -- front cover of Microwaves & RF magazine this month. He's trying to get executive interviews, product notes, application notes. We've revamped all the data sheets that we're sending out. We've got a -- we're really trying to get the awareness up. At the same time, we're trying to also get demonstration appointments made so we can get the gear out there and start showing people what it can do. So that's what we believe is going to lead to more steady business in 1 or 2 units a month. That would make a huge difference to the company here. And that will add to these big systems.

Frank Barresi: Right. Okay, and the Navy is using the Lockheed, I think, it's Lockheed, the software, which is nice -- makes the order nice and big. And would that same software apply to these other aircraft. I mean, the F-15, F-16, F-35?

John Regazzi: Yes. Yes, it would. Again, not for the RADAR filter part of that plane, but for the other things. So testing the Radar on the airplanes, so...

Frank Barresi: And you were starting to say you thought I was trying to get at -- what was it -- when I interrupted you?

John Regazzi: Well, I already addressed it. I think what you're getting at is that trying to build the business on these big $1.7 million systems where there might be a need for only 6 or 7 of them a year isn't going to -- isn't going to allow us to build the business, and we agree with you that's why I mentioned that we're working on this more steady business with the IBM PC kind of concept. So I think I already answered your question.

Frank Barresi: Right. Okay, good, good. And will this filter -- I'm sorry to be asking all these questions, but the filter business, I mean, you've got, I guess, the one, the $10 million order that's in, I guess, I suppose, a steady state at this point. Or maybe it's $3 million a year. I didn't look at the 10-Q or anything. But I guess, that's a reasonable expectation for this F-16, isn't it? Around $3 million of the order you have? $3 million a year or something in that neighborhood in billing?

John Regazzi: Suresh, do you have on the tip of your tongue, but we've got about $10 million in backlog. And in fact, we were able to ship more a few more units, which helped us offset the soft quarter we just ended. But it's the combination of the 18, the 15 and the 16 that we hope to be closer to $8 million this year in total.

Frank Barresi: Okay, and then you talked about the Cs and Ds on the F-15. I guess, to strike you -- is that an F or the order -- the system you have that you're generating substantial revenues, is that for the -- the C and D is additional systems that ...

John Regazzi: Are you talking about an airplane?

Frank Barresi: The F-15 C and D. Didn't I hear you say somewhere that they...

John Regazzi: Well, that might have been Joey on the last call, but I believe we're -- I believe, that the current version of the aircraft is F-15E. And we haven't anywhere near completed the total number of planes that are being upgraded on the E. And I think what Joey had referred to was that there were additional versions of that aircraft that may be slated for upgrade. I'm not an airplane expert, but some of the versions are for grounded packet, some of the versions are for air superiority. And I don't know which one is which, but there's a group of planes. The E is being upgraded now, and I believe the C or the Ds are being reviewed as to whether those will be upgraded also. And I know that they do more than just upgrade electronics. There's airframe improvements and things like that. Not all these airplanes can be flown for this many years without upgrades. So they have to do some refurbishment in general.

Frank Barresi: Sure, okay. Well, it's interesting. I hope this F-35 -- I hope that can work out, and I'm sure you'll keep us posted.

John Regazzi: We certainly will over the -- thank you, Frank, for your questions.

Operator: And we have no questions in queue.

John Regazzi: Okay, I'd like to -- on behalf of Temi and Suresh, I'd like to thank all of you for your interest and support of Giga-tronics. So have a good afternoon.

Operator: Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.