Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2011 Advanced Energy Industries, Inc. Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to Ms. Annie Leschin, Investor Relations. Please proceed.

Thank you, operator, and good morning, everyone. Thank you for joining us this morning for our fourth quarter 2011 earnings conference call. With me today are Garry Rogerson, Chief Executive Officer; Danny Herron, Executive Vice President and CFO; Yuval Wasserman, President of the Thin Films business unit; and Gordon Tredger, Executive Vice President of the Solar Energy business unit. By now, you should have received a copy of the earnings release that was issued yesterday. For a copy of the release, please visit our website at www.advanced-energy.com or contact us at (970) 407-4670. This quarter, Advanced Energy will be participating in the Pacific Crest Emerging Technology Summit Conference on February 15 in San Francisco, the Goldman Sachs Technology and Internet Conference on February 16 in New York, the Jefferies Clean Tech Conference on February 22 in New York and the Semiconductor Summit hosted by Susquehanna on March 6 in New York. The company will announce additional events as they come up. I'd like just to remind everyone that except for historical financial information contained herein, the matters discussed on this conference call contain certain forward-looking statements subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Statements that include the terms believes, expects, plans, objective, estimates, anticipates, intends, targets or the like should be viewed as forward looking and uncertain. Such risks and uncertainties include, but are not limited to, the volatility and cyclicality of the industries we serve, the timing of orders received from our customers and unanticipated changes in our estimates, reserves or allowances, as well as other factors listed in our press release. These and other risks are described in Forms 10-K and 10-Q and other reports filed with the SEC. In addition, we assume no obligation to update the information that we provide you during this call, including the first quarter guidance provided during this call and in our press release. Guidance will not be updated after today's call until our next scheduled quarterly financial release. I will now turn the call over to Garry Rogerson, CEO of Advanced Energy.

Welcome, everyone, and thank you for joining us this morning. I would like to begin with a few comments on the fourth quarter and then discuss our progress on our recently announced strategic plan. Fourth quarter results met our expectations. While sales of our large-scale inverters continue to climb, weak capital spending affected our Thin Films end markets to varying degrees. Total revenues declined 12.5% sequentially to $112.5 million, and we achieved break even at $0.01 per share on a non-GAAP basis. We ended the quarter with $143.2 million in cash, having generated approximately $6 million during the quarter, excluding stock repurchases. At our Analyst Day in November, we presented our strategic plan, including company-wide and business unit goals and long-term operating targets, in order to maximize shareholder value. We began executing on this plan immediately, and I'm pleased to report several accomplishments that should allow each business unit to remain more stable in difficult times while enhancing profitability as revenue grows. Turn to Slide 5. Our company-wide effort to reduce costs and improve margins remains front and center. As you know, in the third quarter, we decreased our annual costs by approximately $6 million. Since then, we have completed several more steps in our planned restructuring. We consolidated our presence in Fort Collins, exiting 2 buildings primarily associated with Thin Films. Given our large footprint, we will continue to look for opportunities to combine facilities. Similar to our actions in the third quarter in Thin Films, we streamlined our Solar Energy workforce in December, which will save us approximately $5.5 million annually. We also began transitioning the sub-assembly manufacturing for our Solar Energy products to our world-class production facility in Shenzhen, China. We are making good progress in clearing the production stage and preparing the operations area to receive…

Thank you, Garry. Turning to Slide 9. As expected, our Thin Films business faced challenging market conditions in the fourth quarter. We had in there a decline of capital investment in our end markets. Certain markets, such as flat panel display and PV solar equipment, experienced more significant declines than others, while sales to the semiconductor industry were higher than expected. Although still down 10% sequentially, the fourth quarter saw a pickup in demand from semiconductors OEM towards the end of the quarter. This led to a slightly different composition of sales -- Thin Films revenue than originally anticipated, but still in line with our overall revenue target. In total, the Thin Films business unit revenues decreased 29% sequentially to $54 million or 48% of total sales, and Thin Films operating income decreased from $16 million to $7 million or at 13.5% operating margin. Turning to Slide 10. We accomplished the fourth quarter restructuring goals we laid out last quarter and implemented the initial phases of our strategic initiatives. First, we combined buildings at our Fort Collins headquarters by reducing 56,000 square feet from the space optimization and streamlining operations. Second, we accelerated our localization plan by establishing a local R&D lab in San Jose, California. Now we are fully staffed and fully operational. This lab is already seeing early signs of success as we improve our customer engagement model to increase development speed and reduce cycle time. We also expanded manufacturing in our Korea facility, adding high-power matching network manufacturing to our locally-made high-power RF generators. These products will be showcased at the upcoming SEMICON Korea show, where we have an opportunity to further promote our growing local presence. Third, we introduced the latest extension of our Paramount RF Generator family, the Paramount VHF, which we also launched at…

Thanks, Yuval. Since joining Advanced Energy in early December, I've had the opportunity to meet with a number of our customers and channel partners at industry events such as the CanSIA Conference in Toronto and also to visit some of our customer sites. What has impressed me most is the high quality and reliability of our products and services, which have led to AE's strong reputation among customers and position in the solar inverter market in North America. Turning to Slide 12. Our results in the Solar Energy business were strong with another quarter of growth, with revenues increasing 12% sequentially to $58 million. During the quarter, we shipped 223 megawatts versus 202 megawatts in the prior quarter. PV Powered and Solaron products over 250 kilowatts drove the majority of our revenue, and we achieved breakeven on an operating basis with operating income of $231,000 despite the inevitable disruptions associated with our restructuring efforts during the quarter. But to reiterate what Garry has mentioned, we do not see this as an acceptable level of financial performance for the business, and are committed to ongoing improvement. Turning to the industry. The solar market faces a myriad of challenges. The expiration of the cash grant portion of the U.S. tax program at the end of 2011 spurred some growth for us and the industry, though clearly not the sharp increase that was seen last year in the fourth quarter. Developers are delaying projects and panel purchases until the last possible moment in order to take advantage of the ongoing decline in panel prices. This has increased pressure on inverter manufacturers to shorten our lead times. We believe that we might see a delayed benefit from some of these projects that began towards the year end because inverters are typically the last piece…

Thank you, Gordon. During the course of my remarks, I will refer to both GAAP and non-GAAP measures. Non-GAAP measures exclude the impacts of the $4.2 million restructuring charge recorded in the fourth quarter. Reconciliation of non-GAAP income from operations and per share earnings is provided in the press release tables. Turning to the fourth quarter financial highlights on Slide #14. Revenues declined 12.5% sequentially and 24.3% annually to $112.5 million. Non-GAAP EPS was $0.01 per share, which excludes the restructuring charges of $4.2 million. During the quarter, we repurchased 1.7 million shares at an average price of $10.26 per share. We ended the quarter with a strong balance sheet, including $143 million in cash after spending $18 million on repurchases. Turning to Slide #15. Solar Energy revenues increased 12.3% for the fourth quarter to $58.1 million this quarter. Thin Films revenue drove the overall decline, falling 29.1% sequentially to $54.4 million. Capital spending in the semiconductor market pulled back again this quarter, though a pickup by key OEMs at quarter's end led to a smaller-than-anticipated decline of 8.9% sequentially to $26.9 million in semiconductor revenue. Across our other Thin Film markets however, weaker-than-anticipated industry dynamics balanced out the slightly better performance of semiconductors. The solar equipment market in particular fell off significantly, down 71.3% to $4.2 million as the market for crystalline silicon came to a standstill. Our service revenues saw a combined commensurate decline with semiconductors falling 12.9% to $11.8 million as fab utilization remained low and customer spending levels conservative. Solar Energy sales represented greater than 50% of our sales. We saw some increase from the expiration of certain aspects of the 1603 legislation, but given the delay in developments in panel purchases, this led to a more moderate sequential increase than we saw last year. We…

[Operator Instructions] Your first question comes from the line of Krish Sankar with Bank of America Merrill Lynch.

I have 2 of them. Either Garry or Danny, when you look at your Q1 guidance, I understand, and whether you're going to be down seasonally, can you help us quantify how many do you think semis, flat panels, solar equipment -- I mean, whether these would be up or down?

Yes. I mean, obviously, the inverters are going to be down because we're in the winter, and I guess you all know that. In the Thin Film, maybe Yuval can give you a little bit more color, but we've seen a pickup in the semiconductor area, but the reverse in all other areas. So all in all, that gives us a neutral experience. But let me let Yuval give you a little bit more color to the semi side.

What we see is a flat to slightly up in Thin Film BU, but the mix will change where the semi revenue will be a bigger piece of the total revenue. We'll see an increase in semi.

Got it. All right. And then a quick follow-up with Danny. Danny, when you look at the full year for 2012, do you expect your inverter revenues to grow in 2012 versus 2011? And what is your view on the demand from U.S. for overall solar installations?

Yes. Krish, when we did our Analyst Day, we've shown growth in the 20% or so range on a CAGR basis. So we would still be in that ballpark for 2012, but we haven't given any specific guidance for full year of the 2012.

Yes. Just to remember, when I was talking about the Solar business, we're not talking about the Solar business, we're talking about sequentially. I mean, there's going to be decent growth compared with the same quarter last year. I think we're talking in the range of near to 15%, something like that.

And then do you have any view for U.S. demand for 2012?

Again, I mean, as you well know, we have products designed for the U.S. market. So we're in a very good position to grow. We're very comfortable at the present time, especially in the utilities and the commercial side. Utilities in high-end commercial, we're looking good. We're looking good. A lot of good prospects are out there. A lot of big prospects are out there. I think we're comfortable at the present time.

Your next question comes from the line of Edwin Mok with Needham & Company.

Well, Edwin, the $12 million is simply in the third quarter. We announced a restructuring of about $6 million of annual savings. And in the fourth quarter, we took a restructuring initiative in our Solar business unit, increased about $5.5 million. And then we also exited 2 buildings here in Fort Collins, which is worth about $800,000. So that's the net of the $12 million or so of current cost reductions.

We would very much expect that to jump again at the end of the next quarter and then probably slow down a little because I think by then, we will have done what I'm going to call the low-hanging fruit. And then after that, it's all in the gross margin. It's all working on that gross margin, leveraging our Shenzhen facility, which is truly a world-class facility. So that's when the hard work will begin. I think next quarter, you'll see another jump, and then we get into the gross margin area. So there's still a lot we can do, and I'm absolutely sure we're going to go way past our targets now. As we dig deeper, there's clearly more to get in that -- in the gross margin.

Well, most of that is probably in the operating area at the present time. And as you well know, that is the easier area to get at. We're now moving towards the gross margin, the manufacturing costs area, which takes more time. Actually, within our company, it's easy. It's actually remarkable what's happening. And as you know, in our Thin Film business we've always, or in the recent past, manufactured in Shenzen and sourced in low-cost areas. Immediately, we started this. We've now got the space in our facility, started to look at the way we define the sub-assemblies that are going to be manufactured there. They're starting to move over there now. So actually, that's happening faster than I would have expected because of our true core competency in Shenzhen. But after saying that, it takes more time, obviously, than in the other areas.

I'll let Dan answer. I mean, again, just to start that one off, our products have been designed for the U.S. We expect to get a premium in the U.S. We do get a premium in the U.S. because of our products and our name and our service.

Edwin, we had the $1.3 million inventory write-off. That was included in the solar business unit. That was the impact on gross margin this quarter.

Okay. So what we see -- what we saw in Q4 is a seasonal decline in the service repair revenue. It's a shorter quarter because of the holidays and shutdowns. But also, what we saw due to a fairly low fab utilization, we saw a decline in return of products for repair, which both the short quarter and the fab utilization decline impacted the revenue in Q4. We saw towards the last few weeks of the quarter some increase in returns as we see some improvement in fab utilization. We expect to see a flattish to Q1, as Q1 is also a short quarter because of the Chinese New Year that may also impact -- seasonally impact the quarter.

Your next question comes from the line of Zach Larkin with Stephens.

I just have a quick follow-up on the initial question Danny was answering. So Danny, you talked about the $4.1 million charge that we had in SG&A being more of a onetime thing. I'm trying to just kind of think through more of a quarterly run rate on those lines. Should we be thinking more in the $18 million per quarter with the cost savings, taking it down below what we have seen in some historic quarters? Or what's maybe some brackets to put around where SG&A might fall?

Well, the one-timer for the quarter, obviously, was the $4.1 million in SG&A. And then the comparison with Q3, in Q3 we had a bonus reversal that occurred, so it gives an artificial difference versus Q4. The real change is just the bad debt write-off that was $4.1 million. On an ongoing basis, if you take our $12 million of cost savings, it's about $3 million a quarter. So if you went back to where we were in the third and fourth quarter, you could reduce that by $3 million and get your run rate there on a go-forward basis.

And then I know initially when you had talked about the future cost savings from the restructuring that the linearity was going to be more back half weighted due to most of them being plant closedowns. Is that still an accurate way to think about the future restructuring charges as we go through 2012?

I think the bulk of the restructuring charge will come near the end of 2012, the remaining $4 million to $8 million of additional costs. We will have in the first quarter somewhere between $2 million and $2.5 million of restructuring charges as we move some equipment out of some buildings into the new space.

Okay. And then Gordon, I just had a quick question for you. With coming on board recently and also having a background in supply chain management, I just wondered what your thoughts where on any low-hanging fruit on that venue and the renewables space on improvements or benefits, things you've seen as you've got your feet on the ground.

I haven't had a chance to quantify any projected savings from the localization efforts that Garry discussed earlier. But obviously, it's critical for us to get the sub-assemblies that we plan to transfer over to the Shenzhen factory bedded down. And as I said in my earlier remarks, we anticipate to be commencing builds in Shenzhen starting in -- well, starting in February. So once we've got those builds underway, we're going to begin the task of looking to localize the components for those sub-assemblies in the local area. And we're fortunate to be able to leverage the existing infrastructure in Shenzhen to do that.

I mean, so to throw a rough number out to you, on the Solar business, about half of the components that we get are from high-cost areas at the present time. Just -- I want to make absolutely sure that's a rough number of the components. But there's a lot we can do in the component area to reduce our costs. The reality at the labor in any of these products is pretty low anyway, so you don't get a substantial saving there. You get it in the supply of the components. And again, as Gordon quite rightly said, and we've said many times, that Shenzhen facility is just our little -- it's a little gold mine for us.

You're next question comes from the line of Jim Covello with Goldman Sachs.

This is Mark Delaney calling in for Jim Covello. I was hoping if you could talk a little bit more about your outlook for the inverter business. Revenues were up 12% year-on-year this quarter, which is still well below your target for 20% to 22% CAGR. I was hoping you could talk about, first, what you're expecting to happen to get back on to that target growth rate, and then subsequently, if you have any view of when that might occur.

Well firstly, I think I had mentioned a number of roughly 15% in the third quarter growth in our inverter business, and we expect that to accelerate through the year. I also said that in the utility area, we are seeing some strength, and we're well positioned with that -- and we're well positioned with our products, as you well know, in the U.S. So we've got plenty of room to grow. On the other hand, I want to make sure that we are focused on making money. So we're not going to go for anything, and we'll go for a business that fits our products. And so I want you to be a little bit careful there.

Okay. That helps. How much did the competitive environment play into this? I know you've talked about in the past some of your customers -- you're offering irrational pricing, and then you're also having recent balance sheet concerns of their own. Do you see any changes in the competitive environment in the next couple of quarters?

Well firstly, I'd never ever say our competitors have irrational pricing because I don't actually know why they do what they do. But what I can see is that we are doing quite well in our pricing because of the type of products we have. Obviously, there are other competitors coming into the U.S. at the present time. But again, our position is really good. I mean, I know we've judged it well. We have great products for the U.S. market, for the Canadian market. We're in a nice position, so we should be able to hold our own.

Okay. And then just lastly from us, the outlook for the semi equipment revenues in the first quarter, do you expect your sales to grow in line with, above or below your key customer shipments?

We project our revenue for semi market in Q1 to be in line with our customers and what is expected in the -- if you look at the average picture from the analysts and what we hear from our customers, we're in line with that growth.

You're next question comes from the line of Mark Bachman with Avian Securities.

Gordon, I was wondering if you can talk about how much of your backlog for inverters here in the U.S. is aligned with the projects using Chinese modules?

That will be a really difficult one for us to answer at the present time. Obviously, as the year goes on, the amount of modules that are in those products will increase. Again, to say that is mainly the commercial utility where we're focused and that the Chinese modules will come in over time. We've said to you that roughly 50% of the components are sourced locally here. We've said to you that we'll start -- we're starting to make modules in China, starting in February of this year. They won't ship for a few months after that, obviously, but we're starting to make those modules there. So as the year progresses, you'll see more and more of the product coming out of China and being assembled in the U.S. in our Fort Collins and Bend facility.

Let me try and be a little bit more specific on this. What I was looking at was the actual solar modules themselves. In other words, I think it'd be very easy for you to look at your backlog. We all know that you're involved with the Mesquite project. And so my point being is, how are you weighing the risk here of the ongoing trade war between U.S. and Chinese solar module manufacturers versus your backlog and the ability for this business to be disrupted if indeed these huge tariffs are put on the Chinese module manufacturers?

Firstly, I apologize for not answering your question the first time. And I'm going to have to apologize for not answering the second time because, I mean, it's all politics and we are staying out of that. We're staying out of that one. So I have no answer for you. My apologies.

Okay. So -- but you wouldn't be able to estimate how much of your backlog is aligned with Chinese module manufacturers given the fact that you have some visibility into your utility pipeline?

That would be a hard number to estimate, Mark. I mean, the on-the-ground salesman might know what panels are being used, but that's not anything we would ever track here in a database level.

And then, Gordon, you had made mention -- I think we all understand winter seasonality in the Solar business here, but you also mentioned competition is increasing. Where does this now put your assumptions then for ASP declines on the solar inverter part of the business? Did it stay the same? Did it get worse? How should we think about this now, the fact that you're raising the kind of increased competition flag here now?

Well, just again to say, we will sell our products to customers who need our products. And we're designing into their requirements. And yes, there's pricing pressure, as there is on all product lines. But we don't see it as the biggest issue for us by a long way. Other companies do their thing. And we will let them do their thing. That isn't the reason for -- that isn't the reason their pricing is what it is. We're not driven by the competition. So I think, again, we've got to think about the way we are. We are in a really good position. We're sitting here with products that have actually been designed for this country in the utility space. And we have the utilities coming to us and wanting to buy from us. These projects take a long time. There are long lead times on them, but we're in a great position to sell to the utility marketplace and the high-end commercial. We're also releasing a new product, which I think we mentioned, the 500, which -- it fits the commercial market beautifully and gives us another -- I think another $500 million of TAM. Am I right, Gordon? So we're expanding our market another $500 million, and we'll start taking orders as to these products this quarter and start shipping next quarter. So we're in a very nice position. I think a lot of the companies that you refer to would love to be us. And we're not, by the way -- we're not in the shrinking areas. So we're not in Europe. We're not in these areas that are having difficult times. So we don't have to battle the shrinkage that is obviously occurring in those areas.

I take it from that comment then that despite everything that's going on in the U.S. solar market, that you still expect it to grow at this point, that you wouldn't classify it as a shrinking market?

It absolutely is not a shrinking market. I mean, we -- I think we -- I think I mentioned, or Gordon mentioned, 15% growth this quarter compared with the same quarter a year ago. I think we're looking for accelerating growth through the year. I think I mentioned that the utility market looks good for us. We are releasing new products. At this moment, we're excited.

Danny, just one last question for me. You had made a comment that you had exited several off-site solar facilities. What -- I just don't understand what that means. Can you just clarify that a little bit more? Maybe some geographies?

Yes, we had nearly exited -- we had a couple of off-site warehouses, Mark, that we basically stopped using them as receiving facilities in the fourth quarter. But we didn't get all the materials out, so that will occur here in the first quarter. All the materials will be transferred to our plants. We would no longer have these off-site facilities, which -- as you know, there's nothing good about having inventory off-site. You just have to handle it twice. You have to count it twice. You sometimes lose it or damage it, taking it to the plant. So we'll be out of those by the end of the first quarter.

Got it. And so these weren't like isolated groups of engineering folks then?

No, no. They were off-site storage facilities.

What we're doing is putting that -- always do -- 2 things we do. One we're reducing the amount of inventory we've got, I mean, clearly, you can see that we have an abundance of inventory. And then secondly, the inventory we have needs to go on the floor in the factory.

Your next question comes from the line of Timothy Arcuri with Citi.

If I look at the ASP in the inverter business for Q4, it was about flat sequentially, $0.26 roughly, and it's been there for the last 3 quarters. So there's not really a lot of sort of realized pricing pressure in that business. I know there's a lot of mixed issues. But it seems a little odd that pricing or that dollar per megawatt wasn't down a bit. If you look at SMA, they missed on margins because of pricing pressures. So is there some competitive dynamic where the U.S. is just holding up that much better, it's just there's that less of a competitive market here towards the end of 2011? And does that argue that you're going to see them come pretty heavily into the market in 2012?

Let's say it again. We have products that fit the U.S. market in the utility and the commercial space. Therefore, we expect to get reasonable pricing for our products. If someone comes in with products that don't quite fit, as you well know, we all know, your pricing drops. That's what happens. Well, we are not going to do that. We're not following the market. We're trying to become a profitable organization. We've got great products, great fit. Let's keep working. Obviously, we're going to drive that cost down. Obviously, over time, prices go down. Any product of any type, anywhere, pricing goes down. And we would drive our costs down faster than the pricing goes down. But we just have products that fit. Our customers love us.

Great. Well, just on that point, I think you sort of alluded at the analyst meeting to potentially, in your effort, to improve profitability in that business to potentially be willing to walk away from some business this year? Yes?

Yes.

So as pricing does get more aggressive, can you sort go through what your expectation is for the size of the market this year? If you sort of back into your share in 2011, it was sort of on the high end of your number. It was probably in the 30% range. But what's the size of the market this year you're banking on? Because it seems like your share's probably going to come down a bit.

It will be interesting to see if our share comes down a bit. Let's see what other people say, I suppose, and then you can tell us if our share comes down. Again, we expect a nice growth rate this year. We expect to become more profitable -- well, it's not hard to become more profitable actually. We're going to become more profitable this year. That's what we're doing. I'm not really worried about our market share at all. The key here is to grow and grow profitably. So I -- my focus, our focus, isn't on market share. After saying that, we're doing very well in the commercial and the utility side, and there are a lot of prospects. So I'm pretty excited. A lot of big prospects out there, as you know. So I think we're well positioned. We'll find out as time goes on.

Okay. And then just last thing for me. If you look at the semiconductor, the big OEMs, it seems like shipments are going to be back up near peak levels in June. So I know you don't want to talk about June, but is there any reason why your revenue relative to what you were shipping back at this last peak shouldn't be back up in the semi business close to that if that indeed turns out to be the case for your customers, which should put you, like, in the mid-40s in June?

Tim, we expect to trend exactly with the market we serve. We're well positioned, and we have been trended with the market in Q4 in semi. We expect it to be the same in Q1 and going forward.

And just in caveat to that, we think we'll move with the market in Thin Films semiconductor. But please remember, flat panel display, please remember there's Thin Films solar. I mean, Thin Films solar, in particular, is absolutely down to virtually 0.

Correct.

So when we're talking about the semiconductors, semiconductor isn't a Thin Film business unit.

[Operator Instructions] Your next question comes from the line of Colin Rusch with Think Equity.

Can you guys just break out how much of the solar inverter revenue was related to the 1603 Safe Harbor commitments that were made at the end of the year for any of your customers?

A little, very little. I mean, I want to break it out, but very little was as a percentage of the whole, not significant really.

And then can you just walk us through the logic? With stable pricing on an average across the solar inverter business, why take the inventory write-off? And if you could relate that back to what you're seeing in terms of mix, between the PV Powered and the Solaron business going forward?

We took the write-off, off, and it was associated with the re-engineering of one product line. So we decided that we had a more -- a lower-cost product that had better features and decided that we would take the write -- it's a better business decision to take the write-off and focus on shipping the better product with the higher margin.

All right. And can you just give us a quick update on the product development for the LED market? You've made some noise about that about 6 months ago. Is that still a focus, something that we should be thinking about as impacting the next couple of quarters of business?

We continue to develop products for the LED market. In the high-brightness LED, we have products in the thermal instruments area that serves a market. This market took a significant decline as there's a huge overcapacity of LED or high-brightness LED, and the equipment sales for this market are expected to drop 70% to 80%. So that's something that we continue in the background. In the flat panel display market, there is significant investment in AMOLED applications as Samsung and others continue to push forward to develop the next-generation displays based on AMOLED technology. For these applications, we continue to gain share and win applications for both Etch and Deposition technologies where our power supplies are critical for the manufacturing process. We expect to see a significant growth in the future in AMOLED for flat panel displays and to leverage that growth in our business.

And your final question comes from the line of Joe Maxa with Dougherty & Company. Joseph A. Maxa - Dougherty & Company LLC, Research Division: I was just going to ask a little more about those, the flat-panel display, and even the industrial side where your sales have been low and what your outlook is going forward.

We expect to see -- during 2012, there's a decline in the flat panel display area. And a lot depends on the timing of Samsung next investment in their investment cycle as they continue to build capabilities for AMOLED devices, as well as next-generation technology for transparent displays and flexible displays. We are very closely working on making sure that our products are designed into these applications. The timing of the growth is still murky, depends on Samsung's investment decisions. Joseph A. Maxa - Dougherty & Company LLC, Research Division: And how about on the industrial side? That's been running around $10 million, $11 million per quarter for several quarters and had a drop-off here in 4Q. What should we be thinking about that product?

You can look at it as going forward, it will be flat. Joseph A. Maxa - Dougherty & Company LLC, Research Division: Okay. And far as the solar panel being basically 0, I mean, are you looking at it really getting down to that level? Or would we just kind of bounce around at $1 million, $2 million, $3 million, or $4 million a quarter? Is that kind of the outlook?

I think it'll continue to be at the same level through 2012. Our main focus right now during this year, as there is a huge overcapacity of panels, as well as equipment, is to continue to work on increasing our content in Thin Films, especially in the fix area where we believe we're going to see growth in the next few years. Joseph A. Maxa - Dougherty & Company LLC, Research Division: I see. Danny, one for you. What should we be thinking about gross margins for Q1? And as we move through the year, I would expect them to go up, but what should we be thinking about in Q1 with lower revenue?

Well obviously, Joe, we don't forecast the gross margin on this, but you have a seasonal mix. In Q1, we will be a little bit more Thin Film than we were inverters in Q4. So you should get some improvement in Q1. But over time, it's a mix of our 2 business units above that.

Bearing in mind that the costs tend to be lower in the fourth quarter than the first quarter. So we've got mixed consideration, and you've got a seasonal cost consideration because there's a lot of time off in Q4 compared with time in Q1.

I would now like to turn the conference over to Mr. Garry Rogerson for closing remarks.

There are not many closing remarks from me. But thank you so much for listening in to us all. Just a few comments. Firstly, we met our plan for the quarter. That is our goal. We have a strategic plan. We're following it. And we look forward to seeing you soon. Thank you. Bye-bye.

Thank you for joining today's conference. That concludes the presentation. You may now disconnect, and have a great day.