In the first quarter of 2024, IPG Photonics (NASDAQ:IPGP) experienced a 27% year-over-year decline in revenue, totaling $252 million, amid soft demand in industrial manufacturing and e-mobility sectors. Despite these challenges, the company remains committed to its long-term strategy, focusing on applications such as welding, cleaning, and medical, and is optimistic about future growth opportunities. Mark Gitin is set to take the helm as the new CEO. With strong cash flow and a reduction in inventories, IPG Photonics anticipates a modest demand improvement by the end of 2024, particularly in EV battery investments and consumer electronics. The company projects second-quarter revenue to be between $240 million and $270 million.
Key Takeaways
- IPG Photonics' Q1 revenue dropped 27% YoY to $252 million.
- The company expects Q2 revenue to range from $240 million to $270 million.
- IPG Photonics is executing a long-term strategy to grow in welding, cleaning, heating, and medical applications.
- Strong cash flow was reported, with $55 million generated from operations.
- Leadership transition announced with Mark Gitin becoming the new CEO.
- The company is optimistic about future growth in EV battery investments and consumer electronics.
- Sales to 3D printing applications in China increased.
- IPG Photonics ended Q1 with $1.1 billion in cash and no debt, along with reduced inventories.
Company Outlook
- Anticipates modest demand improvement by the end of 2024.
- Forecasts growth in EV battery investments in late 2024 and 2025.
- Expects increased revenue in general automotive and industrial applications.
- Predicts stable demand in the US and China markets.
Bearish Highlights
- Weak demand in general industrial manufacturing and e-mobility end markets.
- Sales negatively impacted by weak welding and e-mobility markets.
- Macroeconomic uncertainty causing project delays and reduced orders.
- Double-digit drop-off in high-power laser sales, particularly in Europe and North American EV welding programs.
Bullish Highlights
- Strong cash flow and proactive inventory management.
- Increased sales in 3D printing applications in China.
- Large order for foil drying applications showcasing success in high-efficiency diode lasers.
- Gross margin holding up well despite revenue decline.
Misses
- First-quarter revenue fell significantly compared to the previous year.
- High-power laser sales saw a double-digit drop-off.
- The specific impact of inventory reserves on gross margins was not disclosed.
Q&A Highlights
- The company is participating in upcoming investor events and is eager to engage with investors.
- Management expressed confidence in the strategic plan, focusing on key growth markets.
- Expectations of a more modest improvement in Q3 and a better second half of the year.
- The company emphasized the stability of pricing despite lower volumes.
IPG Photonics, despite the current headwinds, is steering its focus towards emerging opportunities and maintaining financial health. With its strategic plan in place, IPG Photonics is setting the stage for potential growth in the evolving markets of EV, medical, and 3D printing.
InvestingPro Insights
In the context of IPG Photonics' (IPGP) first-quarter performance and future outlook, InvestingPro provides key metrics and tips that offer a deeper understanding of the company's financial health and market position. Here are some insights based on real-time data and expert analysis:
InvestingPro Data:
- The company's Market Cap stands at $3.87 billion, reflecting its valuation in the market.
- IPGP's P/E Ratio is currently at 18.37, which adjusts to 17.63 when considering the last twelve months as of Q4 2023.
- The company's Price / Book ratio for the same period is at 1.6, indicating how investors value the company's net assets.
InvestingPro Tips:
1. IPG Photonics has been proactively buying back shares, a move that can reflect management's confidence in the company's value and future prospects.
2. The company holds more cash than debt on its balance sheet, a sign of financial stability that is particularly reassuring given the current macroeconomic uncertainties.
These metrics and tips are essential for investors contemplating IPG Photonics' stock, especially when considering the company's strategic focus on growth markets such as EV, medical, and 3D printing. With no dividend payments to shareholders, the company's financial policies seem to prioritize reinvestment and share value support.
For a more comprehensive analysis, including additional tips on IPG Photonics, visit InvestingPro at https://www.investing.com/pro/IPGP. Discover more insights and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. Currently, there are 10 additional InvestingPro Tips available for IPGP, offering valuable perspectives for informed investment decisions.
Full transcript - IPG Photonics Corp. (IPGP) Q1 2024:
Operator: Good morning, and welcome to IPG Photonics’ First Quarter 2024 Conference Call. Today's call is being recorded and webcast. At this time, I'd like to turn the call over to your host, Eugene Fedotoff, IPG's Senior Director, Investor Relations for introductions. Please go ahead with your conference.
Eugene Fedotoff: Thank you, Rob, and good morning, everyone. With me today is IPG Photonics CEO, Dr. Eugene Scherbakov; and Senior Vice President and CFO, Tim Mammen. Let me remind you that statements that we make during the course of this call that discuss management or the company's intentions, expectations, or predictions of the future are forward-looking statements. These forward-looking statements are subject to the risks and uncertainties that could cause the company's actual results to differ materially from those projected in such forward-looking statements. These risks and uncertainties are detailed in IPG Photonics' Form 10-K for the period ended December 31, 2023, and our reports on file with the Securities and Exchange Commission. Copies of these filings may be obtained by visiting the Investors section of IPG's website or the SEC's website directly. Any forward-looking statements made on this call are the company's expectations or predictions as of today, April 30, 2024 only, and the company assumes no obligation to publicly release any updates or revisions to any such statements. For additional details on our reported results, please refer to the earnings press release, earnings call presentation, and the financial data workbook posted on the Investor Relations website. We will also post these prepared remarks on the website following the completion of this call. With that, I'll now turn the call over to Eugene Scherbakov.
Eugene Scherbakov: Good morning, everyone. In addition to our earnings release, we announced a leadership transition this morning. Let me start by commenting on the quarterly results first and then I will speak about the CEO change later in the call. In the first quarter, we continued to generate strong operating cash flow, reduce inventories, manage product cost, and return capital to shareholders. We achieved this while facing soft demand in general industrial manufacturing and e-mobility end markets, which together represent over 60% of total sales and negatively impacted revenue across many applications. Our book-to-bill was about 1 and we believe that we are seeing a bottom in demand with a potential modest improvement toward the end of this year. At the same time, we remain focused on execution of our long-term strategy to displace other laser or non-laser tools with our fiber lasers and grow revenue in a number of focus applications such as welding, cleaning, heating, and medical, diversifying away from more competitive applications such as cutting and marking. Revenue in our emerging growth products accounting for 45% of total sales in the first quarter. These laser products and solutions can prove significant improvements in speed and quality of manufacturing processes while reducing energy consumption and other environment impacts. I will cover highlights and comment on the revenue by applications first, and Tim will cover our financial results in more detail. Starting with our largest applications, welding revenue declined year-over-year primarily due to lower demand from e-mobility customers, significant reduction in new battery investment in China compared to the prior year, and delayed EV battery projects. North America reduced demand for our welding products and solutions. At the same time, we believe that we are able to gain some market share in EV welding, closing new business opportunity both with significant new customers and in new applications. Additionally, we are working with a number of leading automotive manufacturers of new fiber laser applications and batteries and general automotive assembly. We remain optimistic that EV battery investments may increase again towards the end of 2024 into 2025, resuming a multi-year trend of building our required battery capacity to support the transition from internal combustion vehicles to battery electric cars or plug-in hybrids. Additionally, we are very pleased to see a pickup in demand from consumer electronics battery applications, as well as growth in welding revenue, in general automotive, and general industrial applications. Adoption of our real-time welding monitoring system and complete automated welding solutions are also showing good results. Our handheld welder sales slowed in North America in the quarter, with some smaller customers being impacted by uncertainty in demand and higher financial costs. But order pipeline and customer interest remain strong. In addition, we are starting to ship these devices to Miller Electric, which will help welder sales in the second quarter and will have more measurable impact in the second half of the year. Sales in cutting applications declined in the first quarter due to continued soft industrial demand across all major geographies. Large OEM customers were managing their inventories, which negatively impacted our cutting sales in Europe, North America, and Japan. Market conditions remain difficult, but appear to be more stable compared to the last several quarters, and we expect that improvement in general economic conditions and reduced customer inventories should result in more stable demand in the second half of the year. Foil cutting sales also remained soft due to weak demand in e-mobility, but our system sales showed some improvement year over year. In other material processing applications, cleaning sales were negatively impacted by softer demand in e-mobility, but we are making progress introducing our cleaning solution across many general manufacturing applications. Cleaning revenue has been increasing and the applications is becoming meaningful contributor to total sales. While still relatively small, heating and drying lasers is another area of future growth for IPG. The application delivered strong increase in sales this quarter as we shipped a large order for foil drying to an e-mobility customer. Additionally, we are working with a number of large manufacturers from across a number of application areas to build innovative heating and drying solutions to suit their needs. Finally, revenue increased in 3D printing applications as the industry is using the large number of high quality lasers to melt metal powder to create parts. IPG has a strong position in this market, providing lasers with high-stability beam characteristics. Outside of material processing, other applications revenue declined due to the lower sales in medical and advanced applications. Our medical business was negatively impacted by a large customer management inventories in the first quarter. We expect medical revenue to normalize in the second quarter and we are working on several new opportunities that we'll launch in 2025 and 2026, and should help this business to grow and become more meaningful contributor to IPG total sales. Before I turn the call to Tim, I will provide a few comments on leadership transition we announced this morning. I would like to welcome Mark Gitin as IPG's next CEO. The board performed an extensive search and selection process and closed Mark Gitin because he passed a unique combination of relevant scientific expertise and proven ability as a successful operator in our industry. I look forward to helping him to make the transition seamless for our customers, employers, and other stakeholders. I also would like to thank the IPG team for its contribution over the last 30 years. I was fortunate enough to be a part of the team that transformed the laser industry and helped IPG to become a global industrial leader. I believe that the best opportunity are still ahead for IPG and fiber lasers will continue to displace other technologies, driving the future growth for the company. I will miss my day-to-day interaction with my IPG colleagues, but I make this transition knowing that we have accomplished great things. This will be my last earning call, but I will remain on the board supporting the next leg of the journey for IPG, and I will also be involved as an advisor to Mark and to the board. With that, I will now turn the call over to Tim to discuss financial results.
Timothy Mammen: Thank you, Eugene, and good morning, everyone. My comments generally will follow the earnings call presentation, which is available on our Investor Relations website. I'll start with the financial review on Slide 5. Despite the headwinds to our revenue, I'm pleased with the resilience of our financial model and the company's ability to generate strong cash flow from operations to support current and future investments, as well as, continued opportunistic share repurchases. Revenue in the first quarter was $252 million, a decline of 27% year-over-year. Foreign currency headwinds reduced revenue growth by approximately 2%. Revenue from materials processing applications decreased 28% year-over-year, while revenue from other applications decreased 25%. GAAP gross margin was 38.7%, a decrease of 360 basis points year over year due to lower absorption of manufacturing costs as a result of lower revenue and higher inventory provisions. These negative impacts were partially offset by improved product cost, mostly as a result of product mix and lower shipping and tariff costs. On a sequential basis, gross margin improved due to lower product cost, a decrease in expenses related to scrap and duty, which were partially offset by an increase in inventory provisions and unabsorbed manufacturing expenses expressed as a percent of revenue. Operating expenses came in at the high end of our expectations and increased both year over year and sequentially, primarily in research and development and sales and marketing, as we invested in resources to drive future growth while still controlling general and administrative expenses. FX headwinds also had a negative impact on revenue and gross profit in the quarter. If exchange rates relative to the US dollar had been the same as one year ago, we would have expected revenue to be $8 million higher and gross profit to be $5 million higher. GAAP operating income was $19 million and operating margin was 7.6%. Net income was $24 million, or $0.52 per diluted share. The effective tax rate in the quarter was 28%. Foreign currency transaction losses related to remeasuring foreign currency assets and liabilities to period-end exchange rates had a negative impact on operating income of $2 million or $0.03 per share. We continued to optimize our footprint and as a result, we sold two buildings during the quarter. The gain on sale of these assets increased operating income by $7 million and increased diluted EPS by $0.11. Moving to revenue performance by region on Slide 6. Sales in North America decreased 16%. We saw a decline in revenue in medical, welding, cleaning, and advanced applications, partially offset by growth in cutting systems and increased revenue in parts and services. Uncertainty in the general demand environment and lower e-mobility sales as well as cutting OEMs and medical customers managing inventories were the main reasons behind the decline in North America. In Europe, sales decreased 21% as growth in welding was more than offset by reduced sales in cutting applications due to large cutting OEM customers reducing purchases to manage inventories. Demand in 3D printing applications was also soft in the region. Economic conditions in Europe remain challenging, but we saw some improvements in e-mobility sales and benefited from a continued rollout of LightWELD in the region. Revenue in China decreased 38% year over year as demand declined in general industrial and e-mobility markets, negatively impacting sales across cutting and welding applications. On the other hand, sales to 3D printing applications increased in China as the industry is seeing growing investments in the region. Moving to a summary of our balance sheet and cash flow on Slide 7. We ended the quarter with cash, cash equivalents, and short-term investments of $1.1 billion and no debt. Our inventories continued to decrease sequentially and we are targeting further reductions over the course of 2024. Cash provided by operations was $55 million and capital expenditures were $28 million during the first quarter. As I mentioned earlier, we sold two buildings in the quarter realizing $25 million in proceeds, which means net capital expenditures were just under $3 million, well below the same period last year. While maintaining a strong balance sheet, we have been returning a significant amount of capital to shareholders through opportunistic share repurchases. We spent $90 million on share repurchases in the first quarter and continue to view current share prices attractive at current levels. Moving to our outlook on Slide 9. First quarter book-to-bill was slightly above 1. However, macroeconomic uncertainty is still negatively impacting demand across all of our major markets and resulting in project delays and reduced orders. Additionally, project delays related to battery capacity expansion are providing headwinds to our sales in China and North America. On a bright side, leading manufacturing indicators have been improving in US and China and bottoming in Europe and Japan, which should lead to more stable demand for our customers. We also expect that medical and LightWELD will return to more normalized revenue levels in the second quarter. For the second quarter of 2024, we expect revenue of $240 million to $270 million. The second quarter gross margin estimate is between 37% and 40%. We anticipate delivering earnings per diluted share in the range of $0.30 to $0.60, with approximately 46 million diluted common shares outstanding. As discussed in the safe harbor passage of today's earnings press release, our guidance is based upon current market conditions and expectations, assumes exchange rates referenced in our earnings press release, and is subject to risks outlined in the safe harbor and the company's reports with the SEC. Before we move on to questions, I would like to express our gratitude to Dr. Scherbakov on behalf of the board, management team, and employees of IPG. He has made vast contributions over the past 30 years, too many to describe today. But we should recognize his contributions, particularly during his time as CEO, including by strengthening IPG's competitive position and laying the foundation for our next phase by establishing a clear strategic plan focused on key growth markets and applications, reorganizing R&D, and disposing of non-core assets. We all look forward to continuing to work with Dr. Scherbakov in his capacity as a Director. With that, we'll be happy to take your questions.
Operator: Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from James Ricchiuti with Needham & Company. Please proceed with your question.
James Ricchiuti: Hi. Thank you. Good morning. First, Dr. Scherbakov, congratulations on your many accomplishments at IPG, and I wish you the best of luck.
Eugene Scherbakov: Thank you.
James Ricchiuti: A couple of questions, the book-to-bill at 1, you seem to be suggesting a bottoming and a recovery later in the year. And I'm just trying to get a sense as to what's given you the confidence of the, albeit probably a modest recovery in the back half of the year. What are you seeing in some of the emerging areas, including the EV and the welding market?
Timothy Mammen: Jim, I think the first positive or slight glimmer of lights, perhaps at the end of the tunnel, is the fact that book-to-bill, albeit off a relatively low revenue number was above 1 for the first time in a year, right? So we've gone through a period of serious macroeconomic headwinds. I think, as well, when you couple that with some of the key economic data that we look at, there's some improvement in that in North America, even in China, there's a bit of an uptick in the PMI data. The PMI data, as we mentioned, in Europe and Japan, has -- seems to have bottomed, and it's certainly not strong in Europe, but it's improving in Japan. More specific to our business, I mean, the cutting market ex-China is still quite weak. You perhaps have seen some of the results from the major cutting companies in Europe that are public. So they're not seeing a specific turn in that business at this point in time. But they do expect some improvement in the second half of the year. I'd say that improvement is probably more towards the latter part of the year at this point. They are starting to run down some of the inventories that they had. On the EV side, there are -- there were some positives out of that as well, particularly in Europe, where we qualified with several new customers and are working on projects there. So the welding business in Europe was actually quite reasonable. There are a number of projects in Asia and China that we're hoping to get more visibility into. There's a lot of work, I think, going on with those that should crystallize one way or another in June with some of the feedback I've had from the sales folks. So there is at least some activity that appears to be starting in that direction. I'd say though, that it still remains a difficult time and improvements -- clearly, the guidance in Q2 only shows a very small improvement, that reflects the modest positive book-to-bill that we've seen. So I think I covered a lot of different things in my answer.
James Ricchiuti: You did, Tim, and actually I appreciate that color. I'm wondering, as we think about -- it's a little further out, but as we look out to '25 and you look at some of these emerging opportunities, are there any that you feel more strongly about that could be meaningful? I mean, I was a little surprised at LightWELD, maybe it's some seasonality, but that I thought would gain a little bit more traction and maybe it's early days with the partnership with Miller and maybe that plays out over the next year or so. But just thinking about the emerging opportunities, medical, what gives you more confidence as you look out beyond this rough spot here?
Timothy Mammen: I think, well, with LightWELD, you've got the Miller relationship that's starting to accelerate. You're seeing the demand cycle in Europe, as we've introduced that product start to ramp up. An improvement in the underlying macro in North America will help with that. The product still has tremendous acceptance in the market, so we strategically remain very optimistic about that. We still remain optimistic about the EV market. I think one of the largest battery makers in China discussed that their utilization was at about 70% overall last year. EV battery demand grew globally by about 37% and 35% in China specifically. The growth, by the way, in storage battery was over 50% last year. So whilst utilization is still not like at 80% or 90%, it continues to increase. So we think that perhaps about 1.5 terawatt of battery capacity is being built out and that still needs to increase dramatically over time as both EV sales continue to grow and storage capacity is added to. I think the other areas of strategic -- the medical business is going to come back in Q2. We're working with numerous new product introductions and other major partners on medical. I think that we'll start to bear greater performance and better performance and traction around growth in 2025. And we actually had a good quarter on some of our micro-processing business. It's still small, but some of the Ultrafast business performed reasonably well with strong deliveries of Ultrafast product. I think we had the strongest quarter on Ultrafast. And then we continue to remain -- have a very strong conviction around the work we're doing on cleaning and heating and drying applications. So I think strategically, as we said, there's a very strong foundation here. There's various headwinds around these different parts of the business, but there's a lot of work going on with developing relationships with customers for the longer term in each of those areas.
James Ricchiuti: Got it. Thank you. I'll turn back on the queue.
Eugene Scherbakov: I'll also add something for new products which we start to introduce this quarter. It's single-mode lasers, especially for 3D applications. And we already shipped the first party to our potential customer, an existing customer. And the first feedback, it was very positive. The main advantage of these lasers, first of all, of course, it's much more compact, much more efficient, and cost -- produces lasers with cost optimization. And we see that it will be also potential for us to take the additional business for 3D applications.
James Ricchiuti: Got it. Thank you. And again, congratulations Dr. Scherbakov.
Operator: Our next question comes from Ruben Roy with Stifel. Please proceed with your question.
Ruben Roy: Thank you very much. And I'd like to echo my congratulations and best wishes to you Dr. Scherbakov.
Eugene Scherbakov: Thank you.
Ruben Roy: For my first question, it's sort of a follow-up I guess, to Jim's question, Tim, which is sort of thinking through the improving book to bill and what sounds like a little bit of improving visibility on where your customers stand with inventory and project delays, etc. But at the same time, it seems like there's been a little bit of a push-out on how you're thinking about recovery. So recovery modest and maybe pushed out to the end of the year versus last quarter when we were thinking about a second half recovery in EV perhaps. Is that the right way to think about it? Are you being conservative on recovery just because of what we've seen and the difficulty in assessing customer progression or has something changed on kind of the timing or scheduling of the recovery as you're thinking about it?
Timothy Mammen: Yeah. I would say I think we have moderated the expectations of the degree of pick up in the second half of the year. I think had book-to-bill being a bit stronger in Q1 and that momentum was definitively starting to accelerate, that would give us a lot more confidence. I think it is more later in the year, as I said, there's several projects on the EV side that waiting to hear about in June that we're working on as to -- I think those projects sort of have a bit of a go, no-go gate around them. I think you can see from the cutting business, whilst it was okay in North America, Europe is really challenged by that if you've seen some of the results from some of the major players there. So I think we're feeling that we're turning the corner a bit. But I would say, yeah, our tone around that is that it's not going to be an immediate ramp into the end of Q2, Q3 with some more modest improvement into the end of the year is how I characterize it.
Ruben Roy: Right. Okay. That's helpful. Thanks, Tim. And then just a question on the gross margins as inventory comes down again and just thinking through perhaps a little bit of a better half revenue-wise. I know you're working on working cap, etc., but from here it looks like we've got sort of stabilization in gross margin. So as revenue improves, one would expect that you get a little bit of an additional bump as your inventories have come down. Can you just walk me through how you're thinking about the second half on gross margins?
Timothy Mammen: Yeah. Revenue, clearly revenue going up, your absorption improves. What I actually -- again, when I came back to this and looked at it in Q1 in detail, I was actually pleased with the gross margin of the actual product. There was some mixed benefit in there. We had some ultra-hyper single-mode lasers. We're starting to introduce, as Dr. Scherbakov mentioned on the additive, the single-mode laser, better cost profile, but we're also introducing the rollout of the higher power lasers with the lower bill of material that is still on target to start delivering product into, I think the end of Q2, beginning of Q3, Q4. So one of the things I always look at is what's the gross margin of the product. And that's holding up pretty well. And we have these cost reduction initiatives that should start to benefit things. And if revenue picks up, that will help with the absorption side. So it's really relative to a year ago, it was absorption rather than say pricing or a structural shift on product gross margin that affected us in actually both Q4 and Q1 this year.
Ruben Roy: Right. Okay. Thank you.
Operator: Our next question comes from Mark Miller with The Benchmark Company. Please proceed with your question.
Mark Miller: Let me also add my congratulations to Dr. Scherbakov, and enjoyed working with him and certainly appreciate all the contributions he's made to IPG.
Eugene Scherbakov: Thank you.
Mark Miller: I just wanted to maybe dig a little deeper into -- you mentioned some factors, I think welding and cutting remains weak, but the drop-off -- there was a double-digit drop-off sequentially in high-power laser sales. Can you provide any more insights about that?
Timothy Mammen: I mean, that's continued to be the weakness on the cutting market, particularly in Europe. And then also we had -- at the end of last year, we had quite a number of EV welding programs that we supplied product into in North America, so that EV demand in North America was also weak in Q1. Those would be the two main things. There's a couple of quite large projects in Q4 for EV welding, Mark, in North America.
Mark Miller: You mentioned a large order, I think it was full-related. Could you give a little more color on that also?
Eugene Scherbakov: A large order for where, sorry?
Mark Miller: I thought you said it was a full application, maybe I'm wrong. So a large order you received?
Eugene Scherbakov: You mean the drying applications or what? Yes. We’ve shipped this big enough order this quarter, it's for foil drying. It's a very important customer for us. And also the first demonstration that how successful can be used our diode high-efficiency diode lasers with efficiency more than 57% for such kind of applications. And, of course, it's only first such kind of shipment. And you'll see a very big opportunity to use this laser for such kind of application.
Mark Miller: Okay. So it was full drying application. Okay. Thank you.
Eugene Scherbakov: Yeah.
Operator: [Operator Instructions] One moment please, while we poll for questions. Our next question comes from Keith Housum with Northcoast Research. Please proceed with your question.
Keith Housum: Great. Good morning. And once again I'll echo, congratulations, Dr. Scherbakov on a great career and all that you've done. Just if I can ask real quick, in terms of the performance during the quarter, understanding markets are challenged right now. But in terms of the mix between the impact that pricing had versus volume, can you add any color on the impact one had versus the other?
Timothy Mammen: It's all -- it's basically all, volume-related pricing continues to be pretty stable in the market. We continued -- we haven't changed our pricing policy. There was -- on an average basis, maybe a little bit of mixed benefit because we sold some ultrahigh power lasers for advanced applications that had a very strong average selling price per kilowatt. But its volume is the primary driver of the poorer results at the moment.
Keith Housum: Got you. I appreciate that. In terms of the gross margins, can you help us understand the inventory reserves or provisions you took in the quarter and the impact that had on gross margins this quarter versus perhaps last year?
Timothy Mammen: Specific amount I haven't got on hand. It was probably 100 basis points higher or something like that on the total provision.
Keith Housum: Okay. Thank you. Okay. [Multiple Speakers]
Timothy Mammen: The provision will be in the Q, the specific number, I think.
Keith Housum: All right. I'll check it there. Thank you.
Operator: We've reached the end of the question-and-answer session. I'd now like to turn the call back over to Eugene Fedotoff for closing comments.
End of Q&A:
Eugene Fedotoff: Thank you for joining us this morning and your continued interest in IPG. We will be participating in a number of investor events this quarter and are looking forward to speaking with you again soon. Have a great day, everyone.
Operator: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.
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