Acacia Research Corp (ACTG) 2008 Q3 法說會逐字稿

Good afternoon and welcome ladies and gentlemen to the Acacia Research third quarter earnings release conference call.

(OPERATOR INSTRUCTIONS) I will now turn the conference over to Mr.

Paul Ryan.

Please go ahead, sir.

Thank you for being with us today.

Today's call may involve what the SEC considers to be forward-looking statements.

Please refer to our 8-K which was filed with the SEC today for our forward-looking statement disclaimer.

With us today is Chip Harris, President of Acacia and Dooyong Lee, Executive Vice President and Clayton Haynes, our Chief Financial Officer.

Today I will give you an overview of the progress we are making in building the business and Clayton Haynes will provide you with an analysis of our financial results.

We will then open the call for questions.

As we just reported, Acacia Research consolidated revenues for the third quarter of 2008 were $13,796,000 compared to $9,544,000 in the year ago period.

The $13.8 million is Acacia's third highest revenue quarter to date.

Trailing 12-month revenues were $41.9 million, compared to $47.9 million at the end of the third quarter of 2007.

Acacia Research reported a third quarter GAAP net loss from continuing operations of $2.4 million or $0.08 a share, including non-cash charges of $3.1 million.

Excluding non-cash charges, we recorded net income of approximately $680,000.

Acacia Research's subsidiaries entered into 20 new licensing agreements in the third quarter and generated revenues from 18 different licensing programs, including 8 new licensing programs.

We also acquired control of 5 new patent portfolios in the quarter for future licensing and ended the quarter controlling 99 patent portfolios.

With the 8 new licensing programs that began generating revenue in the third quarter, we now have generated revenue from 43 different patent portfolios.

Our cash, cash equivalent and investments totaled $45.4 million at the end of the third quarter, essentially unchanged from $45.7 million in the prior quarter.

Our business outlook is very positive.

The licensing success that we have achieved in negotiating over 590 licensing agreements and generating over $160 million in licensing revenues, combined with the scale we have now achieved in controlling 100 patent portfolios, is enhancing our position in the marketplace and increasing our opportunities for strategic initiatives.

Acacia is very well positioned with the assets and talent to grow our business and we are fortunate to be in a business which is uncorrelated with current difficulties in the economy.

With that, I would like to turn the call over to our Chief Financial Officer, Clayton Haynes.

Thank you, Paul.

And thank you to everyone joining us for today's third quarter earnings conference call.

As indicated in today's earnings press release, third quarter 2008 license fee revenues totaled $13,796,000 as compared to $9,544,000 in the third quarter of 2007.

License fee revenues for the nine months ended September 30, 2008 totaled $29,960,000 as compared to $40,594,000 for the nine months ended September 30, 2007.

Third quarter 2008 license fee revenues included license fees from 20 new licensing agreements and revenues from 18 of our technology licensing programs, including initial license fee revenues for our vehicle anti-theft parking systems technology, online auction guarantee technology, projector technology, web personalization technology, vehicle maintenance technology, physical access control technology, high resolution optics technology and software license management technology, 8 new programs in all in the quarter.

Third quarter 2008 license fee revenues also included license fees from our audio communications fraud detection technology, DMT technology, pop-up internet advertising technology, portable storage devices with links technology, remote management of imaging devices technology, rule-based monitoring technology, telematics technology, image resolution enhancement technology, electronic address list management technology and high quality image processing technology.

By way of comparison, third quarter 2007 revenues included license fees from 27 new licensing agreements and revenues from 7 of our technology licensing programs.

As Paul mentioned, to date we have generated revenues from 43 of our technology licensing programs.

License fee revenues continue to fluctuate from period to period, based on fluctuations in the dollar amount of individual agreements executed each period, which is primarily driven by the nature and characteristic of the technology being licensed and the magnitude of infringement or use associated with a specific licensee.

Two, the specific terms and conditions of license agreements executed each period and the periods of infringement contemplated by the respective license fee payments.

And lastly, fluctuations in the total number of agreements executed each period.

Trailing 12-month license fee revenues were $42 million as of September 30, 2008, as compared to $37.7 million as of June 30, 2008, $52.6 million as of December 31, 2007 and $47.9 million as of September 30, 2007.

Our average margin, defined as gross license fees less inventor royalties expense and contingent legal fees for the portfolios generating revenues during the period, was approximately 40% for both the third quarter of 2008 and 2007.

These margins fluctuate period to period based on the mix of patent portfolios that generate revenues each period and the related economics associated with the underlying inventor agreements and contingent legal fee arrangements, if any.

For the third quarter of 2008 Acacia Research reported a consolidated GAAP net loss from continuing operations of $2,420,000 or $0.08 a share, versus a net loss from continuing operations of $4,674,000 or $0.16 a share in the third quarter of 2007, as illustrated in our comparative income statements provided in today's press release and related 8-K filed with the SEC.

Excluding the impact of non-cash patent amortization charges of $1.2 million and non-cash stock compensation charges of $1.9 million, we reported third quarter of 2008 net income of $681,000, as compared to a net loss, excluding non cash items, of $1.4 million for the third quarter of 2007.

For the nine months ended September 30, 2008 Acacia Research reported a GAAP net loss of $11.9 million or $0.41 a share versus a GAAP net loss of $3.8 million or $0.14 a share for the nine months ended September 30, 2007.

Excluding the impact of non-cash patent amortization charges of $3.7 million and non-cash stock compensation charges of $5.7 million, Acacia Research's net loss for the nine months ended September 30, 2008 was $2.5 million as compared to net income, excluding non cash items, of $4 million for the nine months ended September 30, 2007.

Operating expenses for the third quarter of 2008 and 2007 included inventor royalties expenses of $4.3 million and $2.7 million respectively and contingent legal fee expenses of $3.9 million and $3 million respectively.

Inventor royalties and contingent legal fee expenses fluctuate period to period, based on the amount of revenues recognized each period and the mix of specific patent portfolios with varying economic terms, generating revenues each period.

The third quarter of 2008 increase in inventor royalties expense and contingent legal fees expense was primarily due to the increase in license fee revenues in the third quarter of 2008, versus the third quarter of 2007, as described earlier.

Third quarter 2008 marketing, general and administrative expenses, excluding non-cash stock compensation charges, increased $331,000 to $3.9 million from $3.6 million in the comparable 2007 period.

The net increase was due primarily to the addition of licensing, business development and engineering personnel since the end of the prior year quarter and an increase in facilities, corporate, general and administrative costs.

Patent related legal expenses decreased to $1.2 million in the third quarter of 2008 from $2 million in the third quarter of 2007.

Patent related legal expenses fluctuate from period to period based on patent enforcement and prosecution activity associated with ongoing licensing and enforcement programs and the timing of the commencement of new licensing and enforcement programs in each period.

We continue to expect patent related legal expenses to fluctuate quarter to quarter based on the factors summarized earlier in connection with our current and future patent commercialization and enforcement programs.

Looking forward for fiscal 2008, estimated fixed costs are expected to be in the range of $13.4 million to $13.5 million, which is on the low end of the previous guidance provided.

Fixed costs include employee salaries and benefits, facilities costs, corporate legal, accounting and other general and administrative costs and are included in the marketing, general and administrative expense line in our income statement.

Variable costs include patent related legal expenses, patent related research, consulting and maintenance expenses and other patent related development and licensing expenses.

These costs fluctuate quarter to quarter based on business development, licensing enforcement, research and prosecution activities each quarter.

All variable costs, excluding patent related legal costs, are included in the marketing, general and administrative expense line in our income statement.

Estimated variable costs for fiscal 2008 are expected to be in the range of $8 million to $8.5 million, consistent with previous guidance provided.

Variable costs included in MG&A for the third quarter of 2008 totaled approximately $647,000 versus approximately $600,000 in the third quarter of 2007.

Total consolidated assets as of September 30, 2008 totaled $72.2 million, compared to $71.1 million as of December 31, 2007.

As of September 30, 2008 cash and investment balances totaled approximately $45.4 million, versus $51.4 million as of December 31, 2007.

Including the impact of collections on accounts receivable and payment of accruals during the periods, net cash flows from operations for the third quarter of 2008 were approximately breakeven, versus net cash inflows from operations of $4.8 million for the third quarter of 2007.

Net cash outflows from operations for the nine months ended September 30, 2008 totaled $4.2 million, versus net cash inflows from operations for the nine months ended September 30, 2007 of $8.4 million.

Accounts receivable from licensees totaled $10.5 million at the end of the quarter, compared to $1.4 million as of December 31, 2007.

The majority of receivables at September 30, '08 were collected shortly after quarter end in accordance with the terms of the respective underlying license agreements.

Net cash outflows related to patent portfolio acquisitions for the nine months ended September 30, 2008 totaled $1.8 million, versus $1.6 million for the nine months ended September 30, 2007.

I will now turn the call back over to the Paul Ryan to begin the Q & A portion of today's conference call.

Thank you, Clayton.

Operator, can you open the line for questions, please?

Thank you, sir.

(OPERATOR INSTRUCTIONS) Please stand by for your first question, sir.

Okay.

Our first question is from Bennett Notman from Davenport and Company.

Please go ahead.

Congratulations on a nice quarter, guys.

Paul, you guys had a real nice quarter with sort of first time programs.

And I think eight is the most I've ever seen in one quarter.

Could you just talk a little bit about any of those that might be poised on a flurry of activity as these things tend to hit their various stages?

Or are there any of these new programs in particular that we should be keeping an eye on?

Well, I don't think we want to specify specific programs.

Obviously we're engaged in a wide variety of negotiations on all those newer portfolios.

And as we outlined last call what was a little surprising is I think of the 18 newer portfolios that are kind of keyed up for licensing, there was only a couple of them that actually were amongst the new eight.

So sometimes you get surprised.

The ones that we were anticipating that we will have coming on probably this quarter and certainly during the course of 2009, but a number of those -- but I can't get specific about other deals that we're negotiating with some of those newer portfolios.

But it was good.

Yes.

It's the most new licensing programs we've had in a single quarter.

Okay.

And then are there any particular legal events or dates of major import that we should be keeping our eyes on at this point in time?

I don't think so.

We've actually, as you know Bennett, because these court calendars are so subject to change even from week to week, we have made a conscious effort not to try to guide people in looking at target dates because of the variability.

Obviously the information is public on our cases and people can track them independently.

But we just wait and let those events occur.

And they always are subject to change.

So I think early on a couple years ago when we did mention target dates, we found that consistently they were getting moved.

And it was just creating really more confusion than clarity.

And then Clayton, I think you mentioned that much of the $10 million in receivables has been collected.

So if you were to publish the cash balance as of today, is it more like 50 to $55 million than the $45 million number?

Well you do have to take a look at the payables that we also had as of the end of the quarter, as well.

And so I imagine that the increase in cash through today is roughly around, an increase of around 3 to $4 million, just based upon both the collections on accounts receivable, net of the amounts paid out to the various vendors and legal firms we have.

Okay.

And then last question from me.

Paul, I know your business is not correlated to the general economic environment.

But do you have any impacts, either maybe companies more willing to come to you because they don't want to take on the cost or headache in this environment of pursuing their own cases?

Or possibly guys on the other side that push you off a little bit more just because they feel like they either don't have the cash or don't want to deal with legal issues if they can avoid them at this point?

Well, on the buy side I think there's no question that there's greater opportunities than there was previously, given the current financial pressure on some public companies, particularly smaller, NASDAQ public companies that may have valuable IP portfolios that we've encouraged them to partner with us and monetize.

And in the past I think they've been more resistant.

And with the current market climate change, we're definitely seeing a change in attitude there.

So I think that's going to be a positive for us in terms of having additional portfolios to license.

On the licensing side, we have really not noticed any significant change in behavior based on the current economy.

I think each company looks at their potential liability in licensing and makes an independent decision around the economics of that.

So I think it's a plus on the business development side and neutral as far as we can see on the licensing side.

Has there been any impact on the pricing of IP that you might be looking to buy?

Or availability of good IP, as well?

Well quite frankly we determine the pricing.

I mean, we've probably got the best due diligence team in the country.

And actually some of the people who have IP kind of rely on us in terms of valuing that IP or making a reasonable determination.

Because if you really think about it, only a company that monetizes IP as its regular business has a much better of idea of how to value IP.

So quite frankly, some of the companies that we're in discussions with have shown us the IP they're interested in partnering with.

They kind of really rely on us to come up with that valuation because in some cases they are gong to want to be sharing in the revenue participation from that licensing.

All right.

Thank you.

Our next question comes from [Paul Berger] from [Hammock Investors].

Please go ahead.

Good afternoon, Paul.

Can you update us?

Is there any movement on the DMT technology?

Nothing is significant.

We have a hearing I think in the next couple of weeks.

I think the Northern District of California Court will probably continue to do additional claims until spring.

And we probably realistically won't get a chance to go up to the Appeals Court until at least mid-year next year.

And that will be our intent.

There is a handful of claims that we think are critical that we think the Appeals Court would look at and determine that they are fixed and definite.

And those would be key to our prevailing in the case.

So we're expecting right now that we will appeal the claims construction, but we probably won't have an opportunity to do that until sometime first or second quarter of next year.

Okay.

So that means he's already turned down some of your claims?

No.

It just means there's been a variable.

There's been a whole series, as you know, historically five and a half years of claims construction on these patents.

And actually there has been changes in those claims as different parties have made different assertions and different classes of infringers have taken different positions.

So the court actually has had a variety of interpretations.

And given the current standing, unless they change that, we plan on appealing those because we think there are certain claims that are fixed and definite and that's our plan.

But probably nothing will happen at least until the first or second quarter out on appeal.

Okay.

So we still have a long way to go with this?

It appears that way.

Yes.

Okay.

A general question.

When you're looking at a portfolio, is there an average amount that you guys think you're going to get from one before you would acquire it?

And if so, what's that just general number without being --

From a disclosure standpoint and because these conversations would get used in litigation against us and our shareholders, we're reticent to talk specific numbers.

Because that information then would be used by defense counsels for all kinds of purposes.

But obviously at our run rate, and you can see where our revenue growth is beginning to go, they have to be portfolios that have significant levels of revenue to be interesting to us.

And then of course the other variables are we want very high quality patents that we're sure that would have a very high probability of succeeding if we did need to litigate them.

And also it comes down to oftentimes who we're going to need to license these patents to and what our history has been.

So it's a combination of variables.

But obviously the revenue potential is a key one.

And it has to be significant but we for disclosure purposes do not want to put a fixed dollar number on that.

Okay.

And final question.

Considering where the price is, can we expect to see, after the quiet period, any insider purchases or the Company considering a buyback?

Individuals have to independently make their own decisions.

They can't act in concert.

So I don't know.

That would be up to different members of the team.

Certainly given where our prices is our Board from time to time has taken a look at the pluses and minuses of doing a stock buyback and we continue to evaluate that.

But the decision to date has been to deploy our capital in the business rather than trying to shrink the [float of] stock.

Okay.

And one final question.

Anything more on the partnership that you're looking to set up to acquire other IP?

We don't have anything to report today.

We have had a variety of discussions with potential financial partners.

And we expect that we will probably be doing some transactions in the future with financial partners.

But we don't have anything specific to report.

But that's still on the drawing board?

Yes.

Okay.

Thank you.

Okay.

(OPERATOR INSTRUCTIONS) Our next question is from Dan Katz from Apex Capital.

Please state your question.

Good afternoon, gentlemen.

I thought we were in the DJ era where you got little or not settlements without lawsuits.

So can you comment on what maybe changed this quarter that's enabled you to do well?

Well I think most of those new licensing programs, the first licenses, did follow our initiation of filing litigation.

Although obviously they came very quickly.

We still, given the new court guidelines are very cautious and generally it's prudent on behalf of our shareholders and our IP partners to at least have the litigation filed prior to initiating licensing discussions to avoid that potentiality.

But I think we are seeing -- I think there is a combination of events, Danny.

I think we've done a lot more deals with some of these companies.

So sometimes immediately when we file now they are ready to start negotiating.

So I think the more deals we've done with the company in the past, the higher probability of getting deals done earlier.

And I also think just based on our experience in the overall market, I think more companies are responding to us a little faster than they used to, in terms of licensing discussions.

So it sounds like maybe the time factor that worked against you the last couple of quarters might work in your favor going forward; is that fair to say?

Well there's a combination of things.

I think that some of these new programs, if we've license some of the companies before certainly I think that's accruing to our benefit in speeding up the process.

But a number of the ones that related to kind of the slower growth in the first and second quarter were really more based on court calendars where we ran into some technical provisions and we got some delays in the court.

On a couple of those cases they're now kind of back on track and another one is still a little slower than we expected.

But as we said on the second quarter call, yes, we expect to generate those revenues.

It's just a timing issue.

And depending on court calendars and motions that certain defendants bring, sometimes judges are willing to entertain those and they slow you down for 60 or 90 days.

And if you've got active licensing negotiations going on, oftentimes the other side will kind of back off until you get through that next hurdle.

So of the eight new licensing programs you did in the quarter, how many of those were with companies that you'd already done business with or had a relationship with?

I don't have an accurate number.

But again, on your first point I think virtually every license that we did of those new licensing programs did follow the filing of initial litigation.

So because we don't as a regular course go out and offer licenses on a voluntary basis.

It's just far too risky in terms of exposing yourself to declaratory judgment.

So all of those were a result of having at least filed litigation.

But again, we're getting people willing to negotiate with us, I think earlier in the process.

But I don't have the number on that.

Fair enough.

That's fine.

And then do you have any other opportunities to achieve sort of semi recurring revenues?

Things that you're working on?

We do on some of them.

The vast majority of our licenses to date still have been paid up deals, the individual licenses.

But again, to get new licensing programs started with a first or second licensee, obviously we're anticipating a number of those -- the licensing program itself will have recurring revenues for the next two or three years, although each individual license more than likely will be a paid up deal.

And lastly, what's your current employee count, Paul?

Forty-seven.

Thank you, gentlemen.

Next question is from Marco Petroni from MG Capital Management.

Please go ahead.

Out of the eight new portfolios, roughly what percentage have we collected in this quarter and how much do we have to go?

Of the eight new portfolios -- well, obviously these are just first licensing deals on most of them.

So I think you can assume that a very small percentage of the total potential revenue would have been generated from the first one or two license in each of these new programs.

So we're talking maybe 10%?

Maybe 10%, 15% of the total dollar volume on these new portfolios that were collected in the third quarter or, excuse me, in the first quarter?

It's hard to say.

Overall that probably is not an unreasonable guess.

Yes, I mean, they're very early stage.

Obviously a number of these have numerous potential licensees and in the quarter we only licensed one or two parties, so.

With regards to -- you said that these were kind of unexpected new portfolios coming in.

The other ones that you expected, are you expecting them now in Q2 and Q3?

Well I think on the second quarter call we went over -- there was a total of about 18 new licensing programs.

We wanted to give our shareholders kind of a feel of what we thought were going to be the portfolios that would drive a significant portion of future revenue growth.

And as it turns out we did get a number of other licensing programs, got their first deals done actually earlier.

But again, I think if you go back and look at the transcript on the second quarter call, probably over time those portfolios are the ones that are going to drive the majority of our revenue growth over the next couple of years.

And these two new -- eight portfolios, are these small or medium size?

What kind of range are these portfolios in, in terms of dollar amounts?

Well again, we don't want to bias, you know.

These are public calls that we're making and so if we characterize certain portfolios as less or more than each other, that would be an unadvisable thing to do.

So --

Or small, medium or large.

So we have to stay away from that from a litigation perspective.

It's not that we don't want to share the information with shareholders, but --

Not in our best interest.

-- it's not in our best interest or yours for that information to be used by the other side.

I think the ones for the key looking forward if you look at the programs that we outlined in the last conference call again, those are ones with large numbers of potential licensees that we think are very high value patent portfolios like the location based cell phone services where you've got companies such as AT&T and Verizon, Sprint, Alltel, T-Mobile, the cell phone over-air programming.

Those are a lot of longer term programs that we expect to come into fruition shortly.

But none of these really were contributors in the third quarter.

In the last conference call you withdrew your guidance for year over year revenue growth.

Now with your third best quarter and these eight new coming on and potentially some more coming on, would you feel more comfortable in going back to that old guidance of positive revenue growth?

Or does it really matter?

No.

We'll leave it the same.

Obviously now through the first nine months we've done about $30 million.

To exceed last year we need to do $53 million, plus.

So we'd need a $23 million fourth quarter.

And we'll just have to wait and see what the revenues are.

But we're not changing from the second quarter, which all we said in the second quarter is we may not hit the number.

We wanted to put people on notice that we may not achieve it.

But that is where we are right now.

We're at $30 million at nine months and we need to get above $53 million so we'd need $23 million in the fourth quarter.

That'd be a great quarter.

All right.

Thank you.

Our next question is from [Irving Fedderbaum].

Please go ahead.

No.

This is [Farvey].

Hello?

Yes.

We're here.

Yes.

On the non-cash expenses, are they ISOs?

Most of them are not.

No.

The vast majority is a combination of restricted stock and incentive stock options.

And the balance is from the acquisition and merger with Global Patent.

We amortized the cost of the acquisition of those patent portfolios.

So it's a combination of noncash compensation and non-cash amortization of acquisition of patent portfolios.

Now this is the non cash compensation for employees of our company?

Yes.

Well the fact that we're not making a profit seems to be not consistent by giving out, I call bonuses.

How do we justify that?

Well most of those stock options are at $15.00 a share and our stock is currently at $2.00 so they aren't very big bonuses at the moment.

But you still, nevertheless, because of the Black Shoals model have to take the charge.

And a lot of our options were granted when we were recruiting new people, when the stock was at $15.00 and basically the charge is 70% of the $15.00.

So you could look at it as the charges we're incurring are really pretty inflated, but nevertheless those are the accounting rules we operate under.

Last question.

In the 10-Q it was mentioned that and it might have been an expression that you made that we do not expect to make a profit in the future.

I was disappointed to read that.

I think that's a risk factor that probably says we may not achieve profitability in the future.

It doesn't predict the future.

But it's a fairly standard risk disclosure item in a 10-Q from a developmental stage company that has not had a long track record of consistent revenues, that it advises the shareholders and potential shareholders that we may not.

It doesn't say we will not.

All right.

One last question.

A prior person did ask about repurchasing of our stock on the market.

I mean at the price today it appears to be a fantastic bargain.

I hope some more attention is given to the --

No.

We thank you and we are monitoring that and our Board has discussed that.

Okay.

Thank you.

Okay.

Thank you, Irving.

Our next question is from Allen Herman from Wachovia.

Please state your question.

Hi, Paul.

About a year ago you were bringing on board a number of new high quality employees with great background bios.

And it was always understood it was going to take those new employees some time to get up to speed where they were going to begin to be bringing in new business.

Are these new portfolios a reflection of those new employees, and the beginning of what will come out of those hires?

Well we have to look at it.

The process starts really with Dooyong Lee and his team.

And Dooyong is responsible for bringing in the portfolios.

And Dooyong has added new people to his team which are beginning to contribute.

On the licensing side, on the monetization, yes.

We have brought some people in and obviously now they are beginning to have a sufficient amount of time to be assigned portfolios and start generating money.

So, yes, I think the overall development, we continue I think to increase the quality of the people here and the experience.

And clearly in our view we have the best in class team.

There is no one we think in the marketplace that has as good a talent as we do.

And so we're very fortunate.

I think right now we've got great assets.

I mean, we have a hundred net patent portfolios and we've got a great team.

And we expect -- it's never easy.

The key really is bringing in the portfolios and developing the partnerships obviously to have the assets to go out and monetize.

So, yes, we'll continue to try to identify people in industry that we can bring in that will contribute.

Congratulations on a great quarter.

Keep up the good work.

Okay.

Thank you.

Our next question is from Fred Falkenberg] from Bishop, Rosen & Co.

Please go ahead.

Yes.

Hi.

The $45 million, could you break that down?

Do you still have that note or whatever the heck you bought?

That $6 million note?

Yes.

We currently have about $4.9 million in auction rate securities, which is included in that $45.4 million number, of which is comprised of our cash, cash equivalents and investments.

Of that $4.9 million, balance of auction rate securities as of the end of the quarter, there is a scheduled approximately $1.2 million in redemptions in October that we're looking for on those, I guess which will bring the balance down to roughly $3.7 million.

So we are still working with our brokers with respect to the auction rates and attempting to get those redeemed at par.

And has there been any loss on that taken at all or not?

We did record an estimated loss on the student- loan-backed auction rate securities back in the first quarter of roughly 9% to 10% of the par value of those securities.

And that was what?

About $230,000?

It was $250,000.

But we have the potential if it gets paid off at par --

To recover that.

-- to recover that.

Right.

And all to date have been at par.

So it will be $3.7 million that you're exposed to then?

Correct.

Okay.

Thank you.

That will conclude the question and answer session.

I will now turn the call back over to Mr.

Ryan.

Okay.

I want to thank you all for being with us for this quarterly call.

Look forward to the next quarter and in the meantime if any of you have any questions, please feel free to give us a call.

Thank you.

Thank you.

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This concludes our conference for today.

Thank you all for participating and have a nice day.

All parties may now disconnect.