Acadia Healthcare Company Inc (ACHC) 2006 Q1 法說會逐字稿

Good day, ladies and gentlemen. Thank you for your patience and welcome to the first quarter 2006 Pioneer Behavioral Health earnings conference call. My name is Bill and I will be your conference coordinator for today.

(Operator Instructions)

I would now like to turn the conference over to your host for today's presentation, Mr. Brett Moss (ph) of Hayden Communications. Please proceed, sir.

Thank you. Good afternoon and thank you very much for joining us today for the PIHC fiscal 2005 first quarter earnings conference call. Earnings were released this morning. If anyone needs a copy of the release, please feel free to contact my office at 843-272-4653 or by e-mail to jennifer@haydenir.com. Our call today will be hosted by Bruce Shear, President and Chief Executive Officer, and Paula Wurts, the company's Chief Financial Officer. Following management's discussion, there will be a formal Q&A session open to those participants on the call. A replay of this call will also be available until November 21, 2005, at 888-286-8010 for callers within the United States and 617-801-6888 for international callers. Please use pass code 32157214 for the replay.

Before we get started, I'm going to review the Safe Harbor Statement. Statements in this conference call that are not descriptions of historical facts are forward-looking statements that are subject to risks and uncertainties. Words such as expects, intends, believes, plans, anticipates, approximately and likely also identify forward-looking statements. All forward-looking statements are based on current facts and analysis. Actual results may differ materially from those currently anticipated due to a number of factors including, but not limited to, history of operating losses, anticipated future losses, competition, future capital needs, the need for market acceptance, dependence upon third parties, disruption of vital infrastructure, disruption of services and due to natural disaster. All forward-looking statements are made pursuant to the Securities Litigation Reform Act of 1995. Additional informational factors that may affect the business and financial results of PIHC can be found in the filings of the company with the Securities and Exchange Commission.

Bruce, congratulations on a successful beginning to 2006, with measurable growth across all three operating units. At this time, I'd like to turn the call over to you to provide a summary of the financials and details surrounding the quarter. Thank you.

Thanks, Brad. Good afternoon and thank you all for joining us. As Brad alluded to, the first quarter was another solid quarter for us. We did show growth across all three operating divisions. We faced a number of challenges, however, which impacted our reported profitability in the quarter. I'll discuss these events in some detail shortly, but I want to stress that the majority of these costs were isolated incidents, which I not only--don't expect to be repeated, but we anticipate will result in incremental income during the next two quarters and going forward.

It is important to note that our business continues to be healthy, as evidenced by our 12% growth in net revenue; 8.1% growth in net patient care revenue; 20% growth in pharmaceutical study revenue; and 40% growth in contract support services revenue provided by Wellplace. We have a solid foundation in place, which has set the stage for continued growth throughout the balance of fiscal 2006 and beyond in two of these segments. With the new 20 bed unit at DMC, which currently has six beds occupied and is approaching profitability, and seven new agreements for our Harmony and Wellplace subsidiaries. While revenue grew 12% for the quarter versus last year, our total operating expenses were up 18% for the quarter to $8.3 million from $7.1 million last year. While reported income was impacted on a year over year basis, our cash flow from operations increased over $500,000 during the first quarter, a meaningful accomplishment.

Two major items impacted our expense line and profitability. First, we incurred a 20.6% increase in administrative expenses resulting from increased administrative payroll and employee benefits directly related to the opening of the new 20 bed girls' unit at the Detroit Behavioral Institute. Additional costs emanated from fees and licenses related to the Joint Commission on Accreditation Survey at Harbor Oaks Hospital and Highland Ridge Hospital. These surveys only occur every three years. And we additionally have had a continuing quality assessment fee assessed to our Michigan hospital. Secondly, we had a technical issue in our billing software at Harbor Oaks Hospital facility, which led to 158% increase in our provision for doubtful accounts. While this was a very frustrating event that I will describe in more detail in a moment, it's one we do not expect to encounter in the future. While we are now back up and running smoothly, our billing is going smoothly, we incurred significant technical support expenses in resolving this issue, and incurred overtime expenses once our systems were back in operation to get caught up on our billing.

During the system failure, we were prevented from billing to and collecting from customers for a three month period at our largest hospital. So in effect, we had provided services while not having the corresponding ability to receive payments. This created a meaningful increase in the aging of those related receivables during the period, which in turn, created a meaningful increase in the company's overall bad debt expenses. We fully expect a significant portion of this provision will be recovered as we collect payments for those delayed billings that have now been billed during the second and third quarters.

I believe it is very important for you to understand exactly what happened, how it impacts us and what we have done to ensure it does not happen again. We have a formula that works on 30 day increment--I will oversimplify the process--which ages our receivables and impacts our allowance for doubtful accounts and the associated bad debt expense. We've always been conservative on this front and that is why we've never reported a large write down.

For example, if we had a $100,000 receivable that was 90 days old, we might have a 25% reserve against it, or $25,000. If that same receivable goes out another 30 days, the reserve might increase to 50%; therefore, doubling the bad debt expense. In the period between 120 and 150 days, it goes to 75% or $75,000. So if we collect on day 151, the reserve is eliminated. And again, we did have a 90 day delay in the billing. Things are up to speed now and we're very confident in the direction that we're moving.

In this particular situation, given that most payors, including Medicare, Medicaid, Blue Cross, et cetera, only accept bills in electronic submission, we didn't even have the option of delivering hand written bills. It's all digital and electronic in the complex reimbursement world that PHC and other health care providers are operating in. This event has shown us that our systems need to be upgraded, and we are currently in the process of finalizing the contracts for the new software which is expected to be rolled out company-wide through all of our treatment centers during 2006. The functionality will not only track billing and accounts receivables, but will track referrals, managed care visits in days authorized and interface with our medical records to more accurately reflect ancillary charges. We expect this to drive further efficiencies in our business operation once deployed.

I wanted to work initially through the bad news and then we'll pick up where--then I'll pick up again where Paula leaves off to discuss a number of positive developments, and there are many. At this time, I'm going to introduce Paula Wurts, our CFO, to discuss the financial details. Paula?

Thanks, Bruce. Here are the specifics for the first quarter. Total net revenue from operations increased 12.4% to 8.9 million for the three months ending December 30, 2005 from $8 million for the three months ending September 30, 2004. Included in this, net patient care revenue increased 8.1% to 6.7 million for the three months ending September 30, 2005; from 6.2 million for the three months ending September 30, 2004. This increase in revenue is due primarily to the addition to the 30 adjudicated juvenile beds in Detroit Behavioral Institute, which helped to create a 16% increase in patient days for the three months ending September 30, 2005, over the same period last year. Our census discounting the new bills declined in August and September but increased in October as renewed marketing efforts began to take hold. Revenue from pharmaceutical studies increased 20.2% to 1.3 million for the quarter from 1.1 million for the first quarter last year. This increase is due to an increase number of studies and higher revenues produced by our Michigan site.

Contracts support services revenue provided by Wellplace increased 40% to $925,837 for the first quarter of fiscal 2006 from 661,426 for the three months ending September 30, 2004. This increase in revenue is due to the October, 2004 increase in the Michigan call center contract which increased monthly revenue on that contract from $157,000 to $247,000 a month. Patient care expenses in our treatment centers increased 7.3% to 3.3 million for the first quarter from 3.0 million for the same quarter last year. This increase in expenses is due primarily to the increase in in-patient days I mentioned with the majority of the increases in expenses directly related to patient senses such as payroll, food, pharmacy. Lower senses in some facilities tends to result in higher acuity required for higher staffing ratio and higher pharmacy costs.

Patient care expenses related to our research division increased 44.4% to $563,154 for the quarter from $389,963 for the same quarter last year. This is due to the increased number of study patients receiving stipends for participation in the studies. Contract support services expenses increased 15.6% to $597,795 for the first quarter from $516,909 for the first quarter last year. This increase was a result of the increase in the Michigan call center contract which required increased staff and improved technology to adequately support the services required by the contract. This resulted in increased payroll, rent, telephone and depreciation on new equipment.

Administrative expenses increased 20.6% to 2.6 million for the quarter from 2.2 million for the same quarter last year. These changes are a result of the increased administrative payroll and employee benefits related to the set up and opening of the Detroit Behavioral Institute in additional fees and licenses increased 74,657 which compared to nearly zero in the year ago quarter due to fees related to the Joint Commission Accreditation at Harbor Oaks and Highland Ridge and the quality assurance fee assessed in Michigan and increased consultant fees related to the technology failure at Harbor Oaks.

The insurance expense increased 21.4% for the quarter ending September 30, 2005. Administrative expenses related to the research division decreased 8.3% to $633,999 for the first quarter last year. This decrease is primarily due to the reduction in salary expense related to the elimination of the Nevada location and the reduction of the accrued bonuses. Provision for doubtful accounts increased 158% to $656,887 for the first quarter from $254,109 for the first quarter of last year. The company's policy to maintain reserves based on the age of its receivable caused this increase. The increase in the provision for doubtful accounts is a result of the recent technology failure and software failure at our Harbor Oaks facility that slowed the billing process down and the collection process, which increased the amount and the age of the company's receivables. The systems have now been restored and we expect the reserve requirement will decrease in future quarters. Bruce has already covered this in detail.

The company's provision for income taxes of $95,628 for the quarter is significantly below the federal statutory rate of 34% primarily due to the availability of net operating loss carried forward, but at approximately 20% of pre-tax net income, it was a substantial increase compared to the first quarter of fiscal 2005. Total income tax expense for the period represents state income taxes for certain subsidiaries with no available net operating loss carry forward. The company has provided a significant valuation allowance against this deferred tax asset due to the potential changes in the IRS rules that may limit the accessibility of loss carry forwards. The company anticipates paying minimal taxes, primarily state taxes of approximately $200,000 per year, which would keep the effective tax rate low until we capture the total value of our net operating losses, which we expect to occur towards the end of fiscal 2006.

Our net income for the quarter was $384,207 or $0.02 per basic and fully diluted share compared to net income if $775,628 or $0.04 per basic and fully diluted share last year. The company's net cash provided by operating activities was $915,434 for the quarter compared to $134,831 of cash used in operations for the three months ending September 30, 2004. Cash flow provided by operations for the three months ended September 30, 2005 consists of net income of $384,207 plus depreciation and amortization of $135,976, non-cash equity based charges of $75,497 and an increase in accounts payable and other liabilities of $640,730 less cash used for net changes and accounts receivable and other operating assets of $334,908.

The company's balance sheet continued to strengthen with a current ratio of 1.5 to 1 on September 30, 2005. Shareholders equity increased 5.4% to 9.6 million on September 30, 2005, from 9.1 million on June 30, 2005. The company reported 1.5 million in cash as of September 30, 2005, up significantly from $917,630 on June 30, 2005.

With that out of the way, I'll turn it back to Bruce.

Thanks, Paula. Well again, the positives from this comments are is that we're in a very strong cash position, our balance sheet continues to improve, and all the metrics on the financial statements continue to look good and continue to get better. I'd like to take a few moments and briefly discuss our initiatives and our focus going forward.

During the quarter, we received state approval and opened our next phase of the DVI facility, opening 20 new beds. The new unit will serve and treat adolescent females between the ages of 12 and 17 who have been adjudicated by Michigan Juvenile Courts. The programs length of treatment will average six to twelve months depending on the case. The program will focus intensively on residents unresolved trauma, victimization, and chemical dependency issues. The company's received strong support for the program which resolves a recent short fall of female adolescent treatment beds and we have begun accepting placement packets form a state wide network of referral sources. Currently we have six patients enrolled and we expect it to continue to increase occupancy and we are pleased to report this operation is now approaching profitability.

In addition to the initial 30 beds at DVI, are now operating at full capacity again. Our eventual target is to manage over 100 acute and long term psychiatric beds in this facility. There was a significant demand in this region for our services and this is proven to be a significant growth market for us. Given our strong relationship with the City of Detroit and the need for addition capacity, we will continue to incrementally expand this facility but ensuring we do so in a profitable and prudent manner. Moving into the beginning of next fiscal year, we expect incremental growth from the Seven Hills Psychiatric Institute in Las Vegas to start ramping. A facility which we estimate will yield an approximately $8.5 million in annualized new revenue. To remind you, Las Vegas is one of the fasted growing regions in the country. With population growth and associated demographics, it's extremely supportive for further expansion. While the area has not seen a new behavioral health facility built in over 20 years, this is a wonderful opportunity for our company to continue to grow in an underserved market.

On the research study side, Pivotal is currently engaged in 53 enrolling studies with five scheduled to begin in November, up from 43 at the end of the fourth quarter. We continue to see consistent growth in the number of studies preliminarily in the central nervous system area. Our well placed division showed double digit revenue growth for the fourth quarter and margins in this division continued to improve as we generate revenue form our Michigan call center contract, which allowed us to leverage our existing infrastructure.

We just announced today, that in partnership with a major defense contract, that Wellplace had been awarded a new contract to service a government agency. We'll provide tobacco cessation quit line and internet based cessation services. This contract is very exciting. The contract is designed as part of a four state research study to measure the effectiveness of a multifaceted approach to tobacco cessation. The outcome of this study will determine whether the services are carried to a larger population in this agency. We began providing services under a one year agreement in October and anticipate service revenue approximately $900,000.

Again, we just announced this with our earnings today. This is a solid margin business for PHC as we leverage our core competencies and existing infrastructure to provide these services. I don't want to make any bold projections here-- and I won't here-- but we are hopeful that this trend may emerge with other companies and organizations. The inherent health care and productivity costs from smoking are substantial and we believe this may become another target of large providers to try and control expenses.

Our Harmony division announced two contracts during the quarter. Harmony has been awarded the employee assistance program and behavioral health services contract for the Teamsters Securities Fund for Southern Nevada Local 995 beginning December 1st of this year. Teamsters Local 995 has approximately 5,000 members. Harmony also added a new contract in July with the Glazier's Health and Welfare Trust. Harmony was contracted to administer the Glazier's Trust Abuse Detection and Prevention Policy. This is a new service delivery program for Harmony. As part of the contract, Harmony will provide pre-employment urine screens, substance abuse testing and substance abuse rehabilitation programs.

Collectively, we expect these contracts to contribute an additional $200,000 in revenue annually. So there's over $1 million in new, nice margin business showing growth in two of our divisions. We expect to deliver top line growth for fiscal 2006 of at least 15% and expect second quarter profitability to increase substantially over the year ago period. In addition, we do anticipate reporting earnings growth year over year equal to or higher than our revenue growth on a pre-tax basis. The fundamentals behind our growth continue to get stronger and they continue to get better.

I'd like to thank you all for joining the call today. The numbers and our future opportunities certainly make this call and the last few calls easy. At this point, we can open it up to some questions for the group. Again, I'll be available all day tomorrow to field any in-depth investor calls. We're available here. As always, you can go to our website and access information at phc-inc.com or call me directly in our office. That's where we're at right now and what I'd like to do is--we'll turn it over to a few questions. I know it's getting sort of late in the day and we'll go from there.

Okay, sir. Thank you very much. (Operator Instructions)

Our first question comes from the line of Mr. Jim Kennedy of Marathon Capital Management. Please proceed.

Hi, Bruce.

Jim, how are you?

I'm doing fine. Congratulations on the top line. I wanted to drill down though, a little bit on this software issue. As I understand it, and I am not at the office--I didn't see the press release or read it--could you just explain a little bit about --is this particular--was it a billing package? Is it connected to your other systems? Are you replacing everything company-wide from a billing stand point? Could you give us a little more color on that? And then, if you are doing some sort of wholesale replacement, is that going to show up-- is that something you're going to be able to capitalize or less show up as an expense in this particular quarter? How is that going to flow through?

It was an isolated issue. Each of our software to date is isolated in each facility. So to answer that question, it did not affect any other facility. It was a hard drive, soft drive, software crash of magnitude that I've never seen before. So, to answer that question, it did affect our billing. Number two, the new system that we're developing will be a company wide system. This is a state of the art system. It will be installed and hopefully operational by the beginning of our next fiscal year; maybe even a little bit later than that. This is a major process. It's an expensive program but it will be capitalized. It will not be an expense taken in this quarter. It will be capitalized over a number of years. This will be the state of the art billing and software system that will have electronic medical records capability, voice over IP, and a system that will sort of take us through the next ten years. It's a major endeavor that we've been working on and it's a coincidence that this happened in our facility.

So, if I strip out the impact of this one facility, is there a clean DSO number out there or does it get a little convoluted?

If you strip out that facility, I'm sure the day's outstanding, if we were to separate them. We're probably lower but again, this delay and it's in the press release sort of in more detail--this in essence stopped our billing for our largest facility for 90 days. So, every accounts receivable at that facility aged out 90 days. We've been in touch with all of the insurance carriers so that we're not going to have any issue in terms of billing late and potential non-payment of claims. So, but again, it did affect our bad debt percentages and--

What percentage of those billings is insurance related versus direct pay by the patients themselves?

90% of them are insurance related. So, that's--90%.

Okay. Very good. Keep up the good work on the top line and we'll look forward to a good bottom line next quarter.

You got it. Thanks, Jim.

Bye bye.

Thank you very much, sir. Ladies and gentlemen, your next question comes from the line of Tim Kelly of Conquest Capital. Please proceed.

Hi, Bruce. Good quarter. I do have a couple of questions on your balance sheet. You disclosed last quarter your DSOs were 89 days--I'm wondering if you could give us a comparison for this quarter. I know it will be skewed but I'd still like to know what it is.

I don't have that number in front of me. We're sort of on the wire and getting the Q file today. I'm sure we'll have it when we pull all the numbers out that we don't have in front of us so, if you want to give me a call, we can get back to you in the next day and give you that number. I just don't have it in front of us.

Okay. And also I noticed that one of the reasons you were able to keep your working capital ratios broadly in line was stretching out the current liabilities by a fairly significant amount. I'm wondering if you could provide any color on what payable you were able to extend.

well, we actually--it was actually a movement of some of the liabilities from short term to long--Paula, maybe you could answer that questions a little better than I.

Actually, June 30 we converted to a new financial software for the corporate office; everything except our account receivable. Accounts receivable has always been a separate package because health care is a little different in accounts receivable. So, when we converted, we had to stop entering invoices into our system on July 2. so, we had no--actually July 1st was our cut off so, any invoices that we had for June were entered into the system in June and anything that we got by July 1st was entered into the system as accounts payable. Everything that came after that, that was actually a June invoice, we had to accrue that expense and that's why you have a related reduction in accrued expenses this quarter. So, we increase our accounts payable but it was only a shift from the accrued expenses.

I see. Okay. Bruce, one more question for you. Could you speak a little bit to the seasonality that you're expecting in the December quarter? I know in previously conversations, you had mentioned the December quarter tends to be the lowest level quarter for you.

we do have some seasonality in our in patient business in the second quarter. It's becoming less and less prevalent because we have more and more of our businesses not directly related to in patient days. We--our goal, many years ago, was to break even but we've been profitable the last couple second quarters and we would anticipate a very good profit for the second quarter this year. Probably not as high as previous quarters independent of this particular quarter but it generally is a little bit soft.

Okay, but for modeling purposes, would say 15% of the annual expectation be about what you would expect for the December quarter on the in patient business only?

That--I have to think about that number. I can tell you that the percentage of the overall profit--what you're suggesting is that maybe 15% of your profit might be in the second quarter for the year. I think this year it might be a little bit higher than that but, maybe not a lot.

Okay. Thank you.

Thanks.

thank you very much, sir. Ladies and gentlemen, your next question comes from the line of Shane Kim of Camden Partners. Please proceed, sir. Mr. Kim, your line is open. Could you please check your meet feature, sir?

There you go. Sorry about that. Good afternoon, Bruce. As it relates to this billing issue--is this, and I may have missed this--is this an off the shelf software plug that you already have right now or is this something that you--was sort of a home grown software?

Which software? The one that crashed?

The one that crashed.

The one that crashed was a home grown system which we had tailored for our needs back when we purchased Harbor Oaks in '94 and the person who altered it, who adjusted the software is no longer around so; we weren't able to rely on them for any help with regard to recovering it. We did have--we had someone who's been working with us since he's been gone. We've had someone over the past five or six--maybe even longer than that--years that's been able to make any corrections or do any fixes to the system but this time the system just totally crashed and it just is not recoverable. What we did was we, as an interim measure until we can get the company wide software in place, we took the software that we're using at the other two in patient facilities and had the company that writes that software develop--put it together for us so, that they took all the demographics and downloaded it but we had to input all the financial information.

Okay. (inaudible) the timing of this 90 day period, did part of this begin possibly in your fiscal fourth quarter? I'm just trying to get a sense for when did you end up fixing the issue in terms of when did you start re-billing correctly?

The issue was fixed--we started re-billing about three weeks ago, maybe three and a half weeks ago. We're now current on our billing.

Okay. What is your, in terms of the cost-- the company wide system, what do you expect to spend on this in terms of dollars for next year?

Well, it's going to be capitalized over a number of years, so the total cost could be a half a million dollars or more. But this will be capitalized over a number of years and will not have a significant impact on the P&L.

Okay. Another question is on the increased administrative expenses that relate to the 20 new beds in Detroit. Is that-- when did that come up and when was that live and running?

We opened the unit about two and half weeks ago. The salaries began two or three weeks before that. We had to have all the staff in training. Rent had begun before that, so we had a good period of time with no revenue. And now we do have some revenue and, like I said, we're approaching profitability. But we do anticipate that for the quarter ending that unit will be profitable similar to the first unit that we opened, the first 30 bed unit that was actually opened and profitable in the second month of operation.

Do you have the statistics on the number of enrolling studies and the types of care you're providing in the total number? You usually report that quarter to quarter. But do you have that statistic for this quarter?

It's in the numbers here. I'll give you--we have 53 enrolling studies with five more scheduled to begin in November, up from 43 at the end of the fourth quarter.

Right. Great. I missed that.

Thanks, Shane.

Thank you very much, sir. Ladies and gentlemen, your next question comes from the line of Mike Hughes of Delaware Investments. Please proceed, sir.

Yes, I was just wondering if you could provide us with the actual AR balance at the end of the September quarter. Do you have that? And also the pharmaceutical research receivable balance at the end of the September quarter.

The pharmaceutical research balance is about a million four or a million five, if I recall. We'll tell you the AR balance.

A million five.

A million five of the pharmaceutical research and the AR--

A million six--(inaudible)

And the AR balance, Paula? The net?

Total net after allowance for doubtful accounts is 6.2, 6.3.

6.3 million. On that accounts receivable.

Okay. So, going forward, if none of this revenue's at risk, you'll really be over-reserved. Will you actually reverse that accrual? How will that work going forward?

The numbers--ultimately, if we collect the revenue-- we have a very tight formula. If we collect the revenue then reserves will be reversed and that does happen from time to time.

Okay. Can you give us the exact amount of the $656,000 in bad debt expense, how much is related to this one facility?

I believe it was about $400,000.

About $400,000.

Okay. Then last item, the insurance expenses is up, I think you said 21% year over year. Is that purely a function of operating more beds?

That's a function of opening new facilities, professional liability insurance and--does that include the D&O insurance? And employee health insurance or is that--?

No, that's separate.

That's separate. So, we have increased our bed capacity by 40% over the last year.

Okay. Thank you.

Alright. And we have time for one more question, I believe.

Thank you very much, sir. We do have a question from the line of Ernest Andberg of Feltl Capital. Please proceed.

Morning, Bruce. If I go through the numbers that Paula talked about--there's the $402,000 that the doubtful accounts went up. I think she said there was--was it $74,000 of the fees for the accreditation and that area--are there any other expenses that flow through that quarter that you would consider unusual for the first quarter?

We had the start up expenses for the girl's unit. We had the two surveys and accreditation which do come every three years. They happen to hit us both in one quarter. We had the technical support expenses related to the software problem in Michigan so we had both staff, we had technical support people flying in, we had software support people flying in, so--

We also had--we also changed our accounting for options, which resulted in a $75,000 expense.

For stock based compensation.

For stock based compensation that, prior to this quarter, it was reported as the disclosure only.

Sure. I understand exactly.

123R kicked in and we--our report this quarter was $75,000.

That was going to be my next question, but you--that's already answered. So, am I correct that there could be $500,000 to $750,000 of expense in there that should reverse or was one time?

Some of it is one time and some of it could reverse. I want to just qualify that answer.

Yes. The increased reserve for accounts receivable could reverse depending on how much you collect, but is that in question or do you have a pretty good feel for what you're going to collect, Bruce?

Our history has been consistent over the last five years in terms of what our bad debt percentage is as a net--as a percentage of net revenue so, it's significantly higher this quarter. I think it's probably safe to assume that--

A lot of it will reverse.

Our history should repeat itself in that matter and that it should wash over Q2 and Q3.

Okay. Thank you very much.

Okay. I think we're past our general time. We like to try to wrap it up in less than 45 minutes. There are a number of people still on the cue. What I'd like to do is just encourage you--I'll be here tomorrow all day to field any calls that you may have so, if we didn't get to you today. I apologize that we had a huge participation in this call and I can see there are a number of questions that have to been asked. Again, on balance we're optimistic. The fundamentals of the company are as strong as they've ever been. In fact, they're stronger. We had some isolated instances that affected our profitability. The company was still very profitable. The company still showed nice top line revenue growth. So, I'd like to thank you all for joining us. It's 5:15 in the afternoon and I look forward to talking with you all further tomorrow. Thanks so much.

Thank you very much, sir and thank you, ladies and gentlemen for your participation in today's conference call. This concludes the presentation. You may now disconnect. Have a good day.