Anthony Gerstein - Director, IR Ingo Ederer - CEO Rudi Franz - COO and CFO

Troy Jensen - Piper Jaffray Rob Stone - Cowen and Company Ken Wong - Citigroup Ben Hearnsberger - Stephens Saliq Khan - Imperial Capital Ananda Baruah - Brean Capital Jason North - Jefferies

Greetings, and welcome to the voxeljet Third Quarter 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Anthony Gerstein, Director of Investor Relations for voxeljet. Thank you, sir. You may begin.

Thanks Melissa and good morning everyone. With me today are Ingo Ederer, voxeljet’s Chief Executive Officer and Rudi Franz, voxeljet’s Chief Operating Officer and Chief Financial Officer. Yesterday after the market closed, voxeljet issued a press release announcing its third quarter results for the period ended September 30, 2015. The release as well as the accompanying presentation for this conference call is available in the Investor Relations section of the company’s website at voxeljet.de/en. During our call, we may make certain forward-looking statements about the company’s performance. Such forward-looking statements are not guarantees of future performance and therefore one should not place undue reliance upon them. Forward-looking statements are also subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed. For additional information concerning factors that could cause actual results to differ from those discussed in our forward-looking statements, you should refer to the cautionary statements contained in our press release, as well as the Risk Factors contained in the company’s filings with the SEC. With that, I would like to now turn the call over to Ingo, Chief Executive Officer of voxeljet.

Thank you, Anthony and good morning, everyone. Thank you for joining us on the call today. I'm going to give a brief overview of our results for the quarter and then update you on the status of our strategic initiatives. Rudi will then provide a more detailed review of our financial results for the period. We will then open the call up for your questions. Turning please to Slide 4 of the presentation and the summary of our highlights for the third quarter. I am very pleased with our revenue growth of more than 70% year-to-date through September 30, 2015. With that we reaffirm our guidance for 2015. This is a great achievement by the entire organization. For the quarter, total revenues increased 25% to €4.7 million from €3.8 million in last year’s quarter. Systems revenues decreased to €1.5 million from €2.3 million in the third quarter of 2014 as we sold two new printers in the quarter compared to three new printers in the last year’s same period. Timing was an issue at several scheduled installations for the third quarter that have pushed into the fourth quarter. We have shipped six printers in the current quarter to date and received final acceptance required for revenue recognition for three of them. We expect to receive the remaining approvals for the other three printers within the next two weeks and expect to ship and receive final acceptance for another two of three printers by year end. Therefore we anticipate to achieve our target for systems revenues for the full year. Services revenues increased 118% to €3.2 million from €1.5 million in last year’s same period. The increase was the result of revenue growth from the increased capacity and also the center in Germany and the contribution from our subsidiaries in the UK and the United States. Services revenues in Friedberg increased nearly38% compared to last year’s third quarter and 35% year to date. Customer interest and quoting activity remains strong in both business segments and the outlook for printer sales is positive. At September 30 2015 our backlog for systems was approximately €5 million to €7 million representing 10 printers. Our leadless [ph] for systems which consists of potential customer days for which we expect to receive a purchase order in the future, usually within a 12-months period also remained strong. The interest we are seeing is global with notable strengths from Asia and Europe. We are also seeing increased interest and activity in the United States which we attribute to our presence there through our subsidiary near Detroit. The strengthening dollar is also having as we generally sell our printers in euros. Turning now to an update of our strategic growth initiatives on Slide 7. The expansion of our German headquarters last year has been very favorable as we increased those services and systems production capacity. Service revenues in Friedberg remained strong in the third quarter as we continued to receive steady orders for both sand and physical props. The facility runs at near full capacity and our footprint here gives us the opportunity to install additional printers in the future without any significant disruption to our existing operations. We currently have the capacity to produce approximately 50 large format printers annually to support both our internal needs of our service centers and those of our customers. We now move to Slide 8. We established our subsidiary voxeljet UK through the acquisition of Propshop, following a recent review of voxeljet UK’s performance and the current market environment we are focusing the subsidiary and concentrating on solid selling on-demand products to industrial and commercial customers. We will continue to support the film and entertainment industry with 3D printing part but we will exit other non-core business lines that are not part of our long term growth strategy, including the final production stages and the detailing of props. Going forward this should improve profitability of this subsidiary significantly. To that end we have entered into an agreement with an investor group that includes the founder of Propshop to sell certain assets supporting these business lines that I just described. The joint action is expected to be finalized in the current quarter. Rudi will explain the financial impact in more detail in his comments. Turning now to Slide 9 and our service center in the US near Detroit. The monthly revenue trend and margin profile continues to improve as expected and we are confident that we will reach our long term targets there. Like our other service centers in the VJET group, the Detroit facility acts as a showroom for our customers who start out with services and graduate to buyers of printers. We will continue to increase our service capacity there with the V4000 towards the end of the current year. This will give us the opportunity to produce both very large part and high volumes of parts and sand for which we believe there is a significant demand. It is planned that the facility will have a comparable capacity as our German facility by the end of 2016. Our next service center locations will be in Asia. Specifically we are looking at both India and China. We continue to make progress in both countries and are at different stages of execution with each. We will have more details to share with you shortly. Turning now to Slide 10 and focus on continued innovation and advancement in technology through ongoing research and development. In the area of material, we are improving both existing and new material sets to improve the quality of printing and also increase the adoption of the technology by expanding the customer base and addressable markets. With respect to components, an example of our effort here would be related to the optimization of our printer technology and other associated technical equipment to improve the overall printing process. And with respect to machine development, we offer one of the industry’s broadest portfolios of printers for industrial and commercial production. Our initiative here is to standardize and offer uniform quality across all our systems. Turning now to Slide 11. With our own resources and 30 sales agents around the globe, we cover all relevant markets. That brings me to the end of my part of the presentation. I will now turn the call over to Rudi. Rudi?

Thank you Ingo. Good morning everyone. I'll now take you through the financials. Turning to Slide 13, our total revenues increased 25% to €4.7 million in the third quarter compared to €3.8 million in the last year’s third quarter. Gross profit and gross margin in the quarter were €1.5 million and approximately 33% respectively compared to €1.4 million at 37% in the last year’s third quarter. We recognized a non-cash impairment charge within cost of sales of €0.3 million on the digital library, intangible assets as well as a smart small on the raw material. Excluding this one time effect, our gross margin would have been close to 40%. The next slide shows our segment reporting for the quarter. On Slide 14, systems revenue decreased to €1.5 million in the third quarter of 2015 from €2.3 million in the last year’s third quarter. We sold 2 new printers in this year third quarter compared to three new printers in last year’s same period. Systems revenue represented 31% of total revenue in the third quarter 2015 compared to 60% in last year’s third quarter. Gross profit and gross margin for our systems segment in the quarter was $0.4 million and 32 respectively compared to $0.8 million and 36% in last year’s same period. The 2 printers we sold in the quarter was smaller printers which can recover a lower gross margin and our large printers antenna contributed to lower overall gross margin. We anticipate that gross margin of Systems segment will improve as we’re going to see increased segment revenues and leverage the prior investments in our business. We expect gross margin in the Systems segment to be in the range of 40% to 45%, consistent with the outlook we’ve given in the past. On Slide 15, service revenues increased 118% to €3.2 million in the third quarter of 2015 compared to €1.5 million in the last year’s same quarter. Gross profit for our Services segment increased to €1.1 million in the third quarter of 2015 from around orders €6 million in the last year’s third quarter. Gross margin decreased to 34% from 40% in the last year’s third quarter. The antenna charge to cost of sales we discussed is allocated to our services segment. Excluding these charges, the service segment gross margin would have been closer to 45% in the quarter. Always have in mind that those are one time charges. We believe margins at both our subsidiary in the US and the UK will improve our coming quarters and that came began the longer term gross margin profile we have guided to. Looking now to the rest of the income statement on Slide 16. SG&A expenses of $3.1 billion in the third quarter. $SG&A of €3.1 million in the those 3.1 million in the third quarter of 2016 compared to $202 million in the last year’s total. This increase was primarily due to our expanded global com effort as we increase our international presence which we saw that in increased headcount as well as our attendance in particularly patient as several ratios. Research and development expenses were €1.7 million compared to €1 million in last year’s third quarter as we continued to support a number of active projects in various stages of development. Operating loss was €3.5 million in the third quarter of 2015 compared to an operating loss of €1.7 million in the prior year period. Net loss for the quarter was $€3 million or €0.91 per share compared to a net loss of €1.5 million or what do you want – euro cent per share in the prior year’s quarter. On ADS basis, net loss was €0.18 per ADS compared to a net loss of $0.88 in the third quarter of 2014. You can see us on the Slide 17 through 20 of the presentation we have provided a similar review of the nine months year to date period. Slide 21 shows selective balance sheet items. At December 30, 2015 the company had cash and cash equivalents of approximately €3.6 million and short-term investments held in bond funds totaling €34 million. Total debt at September 30, 2015 was approximately €2.9 million and the weighted average shares outstanding for the quarter was 3.72 million, which equates to €18 million of ADSs. We believe that our balance sheet positions us well for the long-term. Moving now on to Slide 22, our revenue guidance for the year which is unchanged. We expect to achieve revenues between €23 million and €24 million in 2015. This implies fourth quarter revenue in the range between $7.5 million and €8.5 million which are very comfortable with. Our refusing expenses for the full year are overall unchanged. Therefore we expect SG&A spending in the range of €11 million to €13 million and R&D spending to be approximately €6 million to €8 million. CapEx spending for 2015 should be in the range of €5 million to €7 million. With respect to the aforementioned same uncertainty, non-core business lines, and the associated assets related to watch out for 2K, we expect to incur lot of approximately 1 million to 5 million in the aggregated order of 2015. That said we expect the business to be more profitable on an ongoing basis as a result of this action. We will provide you with our financial guidance for 2016, early February, 2016 at that. This concludes my remarks and with that, we will now open the call for your questions.

[Operator Instructions] Our first question comes from the line of Troy Jensen with Piper Jaffray.

So many angle for you, I guess, I wanted to just ask questions the system shipments versus recognized revenue. So I know you recognized on two machines in Q3 but do you know how many systems were shipped in the quarter?

Maybe Troy, I will answer those questions. So we shipped in Q4 2015 already, six printers and received for those big three financial acceptance which is needed, three which is needed for booking revenues.

I guess I want to start with Q2 first, assuming Q3 first ready, I know you are recognizing –

In Q3 we shipped and got final acceptance from two printers and in Q4 that said, we ship already six printers and got film final for 3 printers.

But in Q4 how many shipments were shipped? I recognized two – how many accidence year shipment in3.

In Q3 I said we shipped two printers and we got final acceptance of two.

So you shipped and recognized two and then you shipped six and recognized three. Been in the remaining expecting to – for Q4 remaining your second two monitor systems shipments.

And between 2 and 3.

And then how about, Ingo, then – can you talk about traction you are getting with your continuous platform?

So we have several installations of the continuous printer out which we are currently testing, so it’s kind of a testing program for the moment and we believe will further stays in the next year.

And then last question, I know this on your chart you had indicated India and China as future sites. Could you give us a sense of timing and you expect –light up those 2 geographies.

Currently we are in the execution mode means we are mainly doing paper works together the allowance for the businesses there and the record – currently we are on track, means we have to announce something probably beginning of next year. I would say as just confirmed between end of this year and early next year, as Ingo said, there is a lot of paper work to be done on a connected basis, but we all know that and we expect to announce by the end of this year or early year that we have organizations in the starting phase and the bid announcement we definitely tell you more on what levels we are.

Our next question comes from the line of Rob Stone with Cowen and Company.

Hi guys, I have a couple of questions. The first one for Rudi is you came fairly white ranges for expenses in the fourth quarter the revenue range remaining is only $1 million euro spread, what factors cause you to come in at the low versus the high end of those expanse standpoint.

We just confirmed the guidance which we have given earlier this year and we didn’t change it. So currently and compared to what you have $4 million to €1.8 RR –that was this guidance maybe little bit about midpoint but we should not go to the end of those numbers.

And then a question with respect to – I know you are not ready to formal guidance for 2016. But just thinking about the growth drivers, your have a good lead less through persistence, so I imagine we expect continued growth there and you are still ramping in the US service sector but you will enjoy a full year of new contribution in the United States versus only a part of the year in 2015, any comment on how sort of to think about the expenditures relative to this year and then finally with the expansion, do you anticipate that you might start to generate some revenue from China or India in 2016?

We will give a guidance by end January next year, we definitely will follow our gross road. In the US we plan a significant growth in our service segment and I think we disclosed Q4 numbers, so in the Q4 numbers you see a better grip on what we can achieve in our service segment and based on this if you add a certain growth rate investing I’d say in services we pushed up about 50%, you can reach a good number in 2016 for our US activity. China, India based on our current business plans, and the stages that we are, don’t expect a significant revenue out of the Indian operations. They will be revenue contribution out of the Chinese business as well, have in mind that according to our standard, our ever system revenue will be generated volume through the AG, so our subsidiaries act like agents and they invoice the TG some other company did they commission fee and this is shown in other operating income. In the subsidiary, you won’t revenue out of the – you also need to see revenues for maintenance the lower business is doing but not for system.

And a final question with respect to the two new locations, two we are new -- two new geographies are setting up. Are those potentially Greenfield start up for you but are you taking some existing business activity or moving into something that’s already set up?

In India, it’s a surer start of situation and in China it goes in the direction of – it will be start up well but we have a more experienced the team available and it will be flying stuff.

Our next question comes from the line of Ken Wong with Citigroup.

Hey guys, it sounds like in Q4 you guys are going to be pretty zone with installations, do you feel that you guys have the necessary capacity to actually install everything that you guys have indicated is in the pipeline.

Currently you are right, thank you for that question. It’s just definitely a busy quarter for us but for the moment we are very optimistic everything goes as planned and with the current schedule we are still quite optimistic. Yes, should – everything should turn out positive.

And just to remind everybody – do you guys actually have to install everything in order to recognize revenue –

Yes, that’s right. Before booking revenue or booking before our auditor accepts revenues you have to show a final acceptance letter from the customer, meaningful this needs to be up and running and so – as Ingo said, we feel very comfortable with our capacity in our service segment or installation segment and should have enough capacity to do all the infill.

And then on the kind of the Propshop detailing business, so just correct me if I am wrong, so you sounded like you guys are bidding that our or selling that too to – are you guys settling to Jim and then how much did that contribute to the business and do you expect that – would that business no longer in house, why wouldn’t heart your presence in the media and entraining since you rolling stalk about kind of the expertise there is what drove the business.

As you know we did not stop – as we said we did not stop selling to this industry, the only thing we deal is to streamline and to be more focused. There are certain activities in, which we take out and that’s primarily driven to 30-post growth business where we have lower growth margin but overall the activity is - goes in the direction which we like very much, so we are in the film studio, we put into acquire a bit in this industry but as well – that was always in our mind, user activity following industrial clients and the current development simply force us to be more focussed and to take out those cost processes because we simply singling – if you want to scale those, we won’t achieve the high gross which we need to – I think if we do this in the separate entity that’s somewhat there easier.

So I guess should we expect that you guys will – we shouldn’t expect too much growth in that part of the business and kind of the business on hand –

That’s not what we said. You can grow by either blaster or starting service centers and we simply and that’s what we just discussed with Rob Stone. We did – and last year we did a due diligence in the market and we decided to buy a service center in the UK and if you buy something you never buy a business which fits 100% into your own organization, you always have to adjust and what we currently do is we adjust the business to our needs but we are quite happy with this acquisition. Nothing changed, we do service means selling props, we’re selling printers to that organization like we do it in the US or in the upcoming centers in India and China and as well we’re printing pieces, what we stopped it, or what we will stop is doing props process to a certain level. But we still deliver our pieces.

I guess one of the main takeaways there is that we should expect that the gross margins from that business should trend closer to your old company, is that right?

Absolutely, that’s the main intention to bring the who services into the long term gross margin target which we guided. And therefore we adjusted this business.

Our next question comes from the line of Ben Hearnsberger with Stephens.

Maybe this is for Rudi. Of the machines you have shipped in 4Q and that are expected to ship, is it fair to assume that historical ASP on those?

Yes, that’s fair. Back of the envelope number which we have given in the number of printers which are included in the Q, you are right it’s about €500,000.

I guess then the question is how do you handicap the likelihood that all 8 or 9 of the machines are shipped and accepted based on your experience in the past few quarters?

Have in mind that we currently have November 13, so we know quite good, first what is shipped already and where is our team working on installation and getting final acceptance and secondly, we know quite well the next shipping date because traders are already working in our factory and preparing printers for being shipped. So it means that we have everything on radar screen and if order is not close in China or India or wherever we simply ship and we send out people over to do the installation.

Can you remind us how long the installations take?

Usually if a printer is in the country, means if every printer which is not – which is shipped overseas, Asia or US which is not out today is not a realistic change being installed in the current quarter. If you put a printer on ship, it at least takes four to five weeks, so that would mean mid-December, then you have custom gearing and all this, for a big printer, you need at least one to two weeks, so the latest time when we can ship printers is in being installed in this year is next week, otherwise we had to do air freight which is quite expensive which we don’t plan.

The installation time as my colleague said between one and two weeks on target.

And then on the leave list, you mentioned it remains strong, but can you tell us if it was up or down sequentially?

It’s up.

But it’s growing, it’s growing.

And then Rudi, do we expect any more restructuring costs in 4Q?

Not more than we disclosed in the 6-K.

I am sorry, what was the number you called out?

€1.5 million.

Our next question comes from the line of Saliq Khan with Imperial Capital.

The Americas recently began printing the automated props early in the year like you had mentioned. How long do you think it will be before we anticipate they will become a larger portion and more meaningful portion of the overall revenue?

We are currently in a ramp up phase, so the revenues are growing nicely, so we expect that this development goes on till we have full capacity utilization. I think we will see a further development of revenues like we saw this year for the upcoming next year, for the next two, three quarters.

One of the other questions, that was, recently I was just talking about the product mix of the ASP of the shipment. With these shipments of six printers during the fourth quarter could you talk about the mix of the machines or are they higher priced VX4000 or more towards a lower price point machines?

So fortunately some of these printers are large frame machines, with a big revenue contribution. This is the good news but it’s a good mix.

Do you find that the margin profile certainly does change from the larger machines to smaller machines – could you talk about the degree of variances between the VX4000 and those that are lower price points?

Excuse me I don’t get your question. We did not disclose those numbers, based on the backlog you see that the average sales price is about €500,000 and it’s not a secret that larger systems have higher gross margin and lower systems are lower, overall we stick with our gross margin targets of about 45% and I think that’s all what we’re going to say to that point.

If you are engaging some of the sales, the direct sales strategy that you have in place but also looking at the return on investment that you have from the large conferences that you are attending, what type of feedback are you getting largely, what type of pushback are you getting and what type of competition or are the sales people coming back to you telling you about?

Currently the market is very favorable for production systems, so we see a good response from all the markets. I think the areas we are in these are growth areas so we can’t complain the response is very nice.

I fully agree with my colleague, feedback is favorable to all clients and have in mind we’re always in competition against conventional tooling and I think the industry is really awaking and seeking for alternative production methods for their complex low volume products, and I think that we have the right solution for them.

Our next question comes from Ananda Baruah with Brean Capital.

A few if I could. The first is going back to the ASPs December quarter, Rudi, did I hear you correctly in response to I think Ben’s question, that we should use €500,000 as sort of like a ballpark figure for the December quarter, is that accurate?

I said I would use an average sales price of 500 for systems revenue and in that quarter I just said we plan to do in total 7.5 million to 8.5 million – I don’t want to give more detail.

7.5 to 8.5 in systems sales?

No, total revenue – that’s what we guided today for the fourth quarter and the average sales price per system is 500K and I think as well you have seen what is in backlog and what we plan to ship. So I think that should give you a rough number and a good calculation base.

It does and so as you expect to install and get the paper work done on all eight of the printers that you have given the visibility too for the December quarter?

Very likely, yes.

And could you just go through the gross margin adjustment for the September quarter again and then as a follow up to that, should we expect that kind of 40% gross margin level to be the current normalized margin level for the foreseeable future?

For the gross profit – and gross margin the quarter were €1.5 million and approximately 33%, we recognized a non-cash impairment charge – in cost of goods sold of 0.3 million and the digital library intangible assets as well as a small amount in the raw materials. Excluding those one time effects, our gross margin would have been more likely than close to 40%.

And then as far as – and then what would be the dynamics, so those are one time, so what would be the dynamic that would influence the gross margin going forward, I am just trying to get a sense of kind of what the new normal gross margin level –

The gross margin levels which we anticipated in guidance in the past should be above 40%, our long term target is 45% but for this year we always say we try to be above 40% and that should be the common target.

Your December quarter, it seems to be typically a little bit of a strong seasonality in the December quarter – because it’s a strong systems quarter as well

December quarter for sure is very strong in the systems segment and we as well believe that we have a pretty good quarter in the service segment. Means the gross margin should benefit from this – from those revenues.

So as you are probably going into the first half of next year, we could expect a little bit of the same seasonal dynamic with the gross margin, to probably come down off of 40% in the first part of next year as well, that’s a typical pattern?

Yes.

And just with regard to the comments around significant growth in the joint facility in 2016, did I hear you correctly Rudi that you take greater than 50% growth in ’16?

Yes, we for sure anticipate that the revenue contribution just took off and I think we definitely have a good growth potential ahead of us and I would say it shouldn’t be a surprise that the US growth is significantly more than 50% in services next year.

Last one from me, right now, with regards to the OpEx, I understand you are not giving ’16 guidance yet but just anecdotally with the moving parts, with Indi and China services being set up, any help on what the OpEx dynamics could look like next year relative to this year?

I think if we are going to give you a pretty good estimation of our OpEx spending, SG&A as well as R&D spending for 2016, we increased SG&A and R&D already this year significantly and next year in respect of marketing and sales have in mind that we want to grow the company, so marketing and sales is driven besides labor costs – I think labor costs will not grow significantly. I think what will grow is the attributed shipping cost, packaging cost, and agency that will drive those spends in marketing and sales, and finance controlling accounting, I would say we reached a pretty nice level and the other two subsidiaries we will have controllers, but overall that’s it, I think we have spending in SAP to ramp up those facilities and bring them to speed but I think this is not very meaningful and R&D has reached as well a level and for sure will grow but not on the level which we have seen in ’14 and ’15.

And just to sort of close the loop on that, context on various buckets, just to wrap the loop on that, to start off your comments, you said you think Q4 will give us a good sense of the spending level. So should we sort of use the Q4 level as a run rate proxy for 2016?

I said we will give guidance by end January next year, early February. Have in mind we always – our plan did not change, our plan still for 2016 is to become EBITDA positive and based on those estimates I think you can build a pretty good model and for sure if you want to receive the detailed numbers for ’16, even better –

And then I will just ask one quick follow up off your EBITDA profitable comment and I will give the floor. So can you just remind us what the context of the EBITDA profitable comments are, is it exiting ’16 or is it at some point prior to that –

It’s for the full year 2016 we plan EBITDA positive.

Our next question comes from the line of Jason North with Jefferies.

I had a couple questions here on Propshop and just trying to get a sense because it’s impressive that you are maintaining guidance for the full year even though you are losing some of those revenues here in Q4. Just trying to get a sense of those headwinds, so could you give us what the Q3 revenues were for Propshop?

We did not disclose the individual service center revenues.

Can you give a sense in terms of what kind of revenues in Q4 you are walking away from here that would have been otherwise?

It’s minor, I said we just announced that we plan to execute this and so currently we see full contribution and the revenue which we are going to give up is not relevant for the long term growth. It’s more relevant to gross margin.

Any sense that you could give in terms of what your Q3 gross margin would have been if you didn’t have Propshop in there?

We didn’t disclose this.

And then you have been saying a 40% to 45% long term target here which had been including Propshop, so does that mean that there could be possible upside longer term to that 45% target?

We said this even at the beginning of our IPO when having not Propshop in line, we stick with this over the last two years and it’s still the same 45% plus and that doesn’t change Propshop, currently we are still in a mode where we build the company where we have certain investments but when we did the math and when we did the business plan, for the next couple of years we said it’s helpful if we don’t focus on certain processes and don’t implement them in our subsidiaries.

And then last one here on Detroit, are you seeing more demand overall for your Sandra [ph] in the past --

For both areas the demand is very strong, so we can’t really say. We are running good with material set.

Our next question is follow up from the line of Rob Stone with Cowen & Company.

Just a housekeeping question, Rudi, in the other operating income and expense you formed an expense of not quite 300,000 in the quarter, it’s typically been a small income. I think the main driver of that was FX but if you could provide some color on that and how we might think about that line of the P&L for the fourth quarter?

That’s right. When you go into the 6-K, the other operating income was 119,000, and this mainly includes the recognition of income related to sales and leaseback transaction.

No, I understand that part, doe the other operating expense cause it to be a net negative and I think that was –

We recognized the non-cash impairment – that was in cost of goods sold – the spend in the third quarter was 300, and that was mainly to from foreign currency exchange rates transaction.

So based on what you have seen with FX rates so far in the fourth quarter, was this Q3 impact episodic or do you expect another negative currency impact in the current quarter?

We expect small positive effect.

Our next question is from the line of Troy Jensen with Piper Jaffray.

I was just going to ask a question on OpEx but Rudi already answered it. So I think I am good. End of Q&A

Thank you. Mr. Ederer, there are no further questions at this time. I’d like to turn the floor back to you for any final concluding remarks.

Thank you and thank you again for your participation in our today’s call. We look forward to seeing many of you at next week’s Fomex [ph] trade show in Frankfurt. See you. Thank you.

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.