Cognex Corp (CGNX) 2005 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen. Welcome to the Cognex's "Ho-Hum" First Quarter Conference Call. At this time, all participants have been placed on a listen-only mode and the floor will be open for questions following today's presentation. It is now my pleasure to turn the floor over to your host, Richard Morin, Cognex's Senior Vice President and Chief Financial Officer. Sir, the floor is yours.

Thank you, good evening, everyone. Earlier tonight we issued a press release announcing Cognex's earnings for the first quarter of 2005. For those of you who have not yet seen this report, a copy is available on our website at www.cognex.com. The press release contains detailed information about our financial results, and because of that, we're not going to repeat most of that material. I'd like to emphasize that any forward-looking statements we made in the press release, or any that we make during this call are based upon information we believe to be true as of today. Things often [INAUDIBLE] actual results may differ materially from those projected or anticipated. You should refer to the Company's SEC filings, included our most recent form 10-K for a detailed list of these risk factors. Now I'll turn the call over to Bob Shillman.

Thanks, Dick.

The press release is, indeed, a record press release. We've checked it and we believe the first time in history anyone issued a press release with the headline "ho-hum results". Unfortunately, the earnings that we report are not record. I wish I could be more upbeat in the call. But as I did say in the press release, we met the guidance we gave in January and although we met or exceeded our internal plans, and although we were nicely profitable as a percent of revenue, it was pretty much an uneventful quarter. But you know that's a lot better than having it be a negative eventful quarter.

But there were a couple of bright notes in the quarter. The major one is the total bookings increased quite nicely. That's 16% over the prior quarter. And all three of our major markets participated in that growth. The three markets, major markets being the semi-electronic OEMs, factory automation customers, and then our Surface Inspection customers.

The largest increase in Q1 bookings was due to record bookings at our Surface Inspection Systems division, where orders in Q1 were slightly more than $12 million. This represents a truly significant increase over the prior record, which was $8.5 million and was well above our plan for the quarter. Part of that $12 million at 50 included 4 very large orders, each valued at $1 million for SmartView, which is our surface inspection system. Those orders were from three existing Companies, JFE, which is the largest steel company in Japan, [Chorus], the largest European steel manufacturers and International Paper, which is the world's largest paper company. And We received an order from a new customer named [Erdemere], which is the largest steel company in Turkey, a country that is now a growing steel producer.

New features that we added to SmartView in 2004 increased our competitive position in both the metals and the paper industries, which helped us gain share as well as penetrate deeper into these markets. In addition, improving prices for metals, that's the metals themselves over the past year, enabled the manufacturers to invest in quality and process improvements, including Surface Inspection.

In the Module Division Systems division, orders from discrete manufacturing customers and the factory automation area increased in the first quarter on a sequential basis, primarily due to the higher demand in the consumer electronics industry. I can't give you the particulars of this, other than to tell you we had strong bookings related to both disk drive assembly and cell phone assembly.

Orders for In-Sight, our family of low cost vision sensors, were strong in Q1. We saw some softening in demand for the In-Sight wafer I.D. reader, that's a product sold into the semi-equipment market, that's following the trend in that industry. However, excluding that particular product, bookings for In-Sight were up over 30% over the first quarter of 2004. So that is, orders in the factory automation segment of In-Sight, were up 30% over Q1 2004.

One area of disappointment to all of us in the first quarter was demand for Checker, our new, simple to use vision sensor which started to ship to customers in the beginning of '05. Checker continues to be very well received by customers, and they say it is right on target as far as price, functionality and ease of use. However, it now appears that my initial bookings target of $10 million for the year may be overly optimistic. We are actively investigating why it's not taking of as quickly as we hoped, and it might be due to the fact that we're still developing the distribution channel. We're are just inexperienced in distribution, and perhaps it takes longer when pushing a product through distributors. We continue believe that Checker represents a revolutionary product, it will achieve high revenue levels. But it appears that the introductory phase is going to take longer than we initially expected.

The last area of business that I'd like to address today is demand from our customers in the semiconductor electronic capital equipment industries, which have been a cyclical slow down for the last nine movements or so. In Q1, orders for these customers increased on a sequential basis, leading us to believe, or maybe hope that the worst of the downturn is behind us. However, the rate of increase going forward is still in question, because the higher levels of bookings in the first quarter was not broad based, it was due to an increase in orders from a handful of our customers. Nevertheless, it's nice to see that the trend is heading in the right direction in that segment for the first time in a long time.

As a result of the increase in bookings overall during Q1, we expect revenue for Q2 of 2005 to increase by 5 to 15% on a sequential basis, and that results in our projection, hope, prayer, that revenues will be end up between $46 million and $49 million. And at that revenue level, earnings are expected to also increase and we're in now looking at $0.13 to $0.17 per share. There are a number of details behind all of this, of course, that we've published along with the press release that you're free to read at your leisure. We prefer to use the remaining time to any questions that you may have that are not covered in the materials that we so nicely provided to you.

That's it. We'll take questions, operator.

Thank you. The floor is now open for questions. [OPERATOR INSTRUCTIONS] Your first question is coming from Suresh Balaraman of ThinkEquity. Please go ahead.

Good afternoon, guys.

Hi, Suresh.

In terms of -- I know it's kind of hard to talk about Q3. But when we look at Q2, the biggest jump seems to have come from the surface inspection product, which is somewhat -- it's kind of lumpy. Historically it has ranged -- in the past several quarters in the 7 or $8 million range. Now it's probably $12 million plus. I'm wondering if we should -- should we expect a sequential flattening in Q3 or a downtick in a downtick in Q3? What are your thoughts on that?

Well, typically, in Q3 we see a softening due to the factory automation end user business, especially in Europe and to a certain degree in the U.S., you know, due to the summer shutdowns and vacations. The other thing that you should note, Suresh is that not all of those 50 bookings that occur in the first quarter are scheduled to ship in the second quarter. Because of the greater significance of the systems being sold, the lead times go out. Some of what was booked into Q1 is not scheduled to ship to the customer until Q3. So it's not an immediate turn around in Q2.

Also, Dr. Bob, what are the new targets as far as Checker is concerned? I understand $10 million may have been a bit optimistic?

Well, how about zero? [ Laughter ] That will be a little pessimistic. Somewhere between those, you know? I'm losing faith in my ability to predict these things. I was making the prediction of $10 million based on the enthusiasm that we saw at our initial customers, and based on the fact that the product is right. The product is right. So all of us here are scratching our heads.

And saying, well that, because there's one particular customer, a big customer, makes paper products, loves it. Says "geez, you guys got it right." We've had no complaints from customers.

It has to be, and I believe it is, due to the distribution, that there is a lag in the process of getting distributors trained or getting them energized. I don't know. We're looking at it now. Be foolish for me -- it's not foolish for me to project anything. Foolish for you to listen to me. I've been wrong already.

Okay, thanks. Yeah.

As a matter of fact, as an add on to that, I'd like to say I had a conversation four years ago with a Company that distributes a competing product. At that time. They introduced an early version of something like Checker, doesn't have the sophistication, doesn't Cognex Vision in it.

I remember him telling me, this is a competitor that uses only distribution. And I was surprised -- he was telling me how slow the ramp up is. That's what they've learned. They've been in the business 20, 30 years, selling sensors through distribution. He told me how long it takes to put things through distribution. And I was very surprised, and I think what we're seeing is not unusual. I think he told me it was 12-18 months before things get traction when you go through distribution.

I could be off by a year or in this prediction. I was assuming that, you know, you give people a great product. You bring it to their door and they buy it. That's not the case. And, you know, we don't control distributors. We're new at this. We're pretty savvy about this things and we've brought on board some people with a lot of experience at distribution.

But they are they're unlike salespeople. Not your own salespeople that you can give a quota to and direct them to only sell. Distributors sell a variety of things. It's going to take some time I suppose for this product to get traction. But, it appears that it is, there's nothing -- not only appears, there is nothing wrong. There is nothing wrong with the product or the targeted product. It's the distribution channel takes time.

The other thing I'd like to comment on is based upon what we're seeing from the rest of factory automation and our Surface Inspection Division, we feel at this particular point any resulting shortfall we might see in Checker, will be made up in these other products anyway.

Yeah. That's one of the great things about our Company. We have different products in different markets. If one is a little slower, it turns out it balances somehow. We never expected Surface Inspection to bring in these kinds of bookings. Mark is doing a great job.

Unfortunately, unfortunately, the more bookings he brings in, the more revenue, and that draws down our margins. I keep on kicking him in the behind, and it's no fun just bringing in low margin business, so we're going to be addressing that too.

Next question, I'll make them up as I go long if there aren't any questions.

Your any question is coming from Alexander Paris of Barrington.

Good afternoon.

Hi, Alex.

A ho-hum day out here in Barrington.

Yep, yep. Maybe it's spring fever or something.

Is that the new term to go along the with economy or the markets when it ho-hum, that means it's great? Or was your expectations a little higher than that?

Nope. Ho-hum means it's -- nothing special, you know.

Just a question. The discreet manufacturing factory automation market here. I don't know if that's the first time I've seen that term. Is that all general industrial, mostly end user, but also includes semiconductor and electronics if they're not OEM?

Yes. You've got it.

That could be hurt by also by just a general weakness in the electronic and semiconductor industry too?

Yes. It would be hurt by that. But we're seeing growth outside of the electronics for In-Sight, for example. Growing very nicely.

So your three businesses were number one in terms of growth was Surface, number two factory automation and number three, OEM semi-electronic?

Number one is right, two and three, we're checking. As a percentage, I would have to say yes.

Yes.

You're right.

Generally if you're all capital spending market, just say there is two capital spending markets out there. Electronics and semiconductor, and then just general industrial --

That's a good way of thinking about.

You know, the numbers coming out in the aggregate are fairly good for general industrial spending, which has been picking up. Do you visibly see a better outlook, or better comments coming from people in the Midwest America, kinds of industrial?

You know, I haven't been in the Midwest America in some sometime.

Okay.

I think the answer to that is is yes to a certain degree. Typically what -- if you go back to like 2000, 2001, '02, '03, we generally those businesses had a -- we've had a strong fourth quarter in bookings from those customers as they were spending whatever remains they had of their capital budget for the fiscal year. Then we saw a softening in Q1. This year, for the second year in a row, we continue -- we saw a pick up in Q1 over Q4. So I think that goes to that, yes, things seem to be, you know, okay in that respect. We're not -- we're not seeing that decline. Who knows when the semiconductor electronics OEM capital spending will increase.

I was going to ask the 16% increase is that better than what you'd usually expect seasonally, in the first quarter over the fourth quarter?

Yes.

Yeah. Actually -- what drove me to put "ho-hum" in there, why we sort of in a funk about this, I'll tell you. Because the comparables compared to Q1 of last year. Q1 and Q2 were great quarters because semiconductors was way up. So it was impossible to be as good as Q1 and maybe even Q2 in this Q1 of 2005. That's one reason. I looked at the negative comparisons. We expected the negative comparison.

Don't get me wrong, ho-hum is good.

16% increase in bookings is great. We're happy. Q4 to Q1 being down 2% in revenue, but up in bookings, is quite good. Quite good. As a matter of fact, if I look back in history, usually be down in bookings Q1 for '04. I could have written the press release different. I couldn't write record results. I couldn't say great results. The comparables aren't. So it's ho-hum. That's why.

Okay.

We made a lot of money, okay. We made -- it's not, you know, things aren't that bad when you make $5.3 million. How bad could it be? Right. Just a couple of number questions. Tax rate, do you see that 26% for the rest of the year? Or no?

Based upon everything that we see right now, we're expecting the rate to hold at 26% for the year.

And the -- and the cash -- what average return to do you get on the cash?

It's starting to edge up now that we're just under 2%.

Okay. And finally, did you do any repurchase this year? You didn't mention this quarter?

Not in the quarter, no.

Thank you very much.

You're welcome.

Thank you. [OPERATOR INSTRUCTIONS] Your next question is coming from Jim Ricchiuti of Needham and Company. Please go ahead.

Good afternoon.

Hey, Jim.

Hi, Jim,

Question on the [INAUDIBLE] business. Normally, you guys have talked about it being lumpy,but is sound like some macro-trends out there, just to help the metals and papers business. That you've gotten more visibility than you normally would have?

Probably all of our -- Cognex and its competitors had a good quarter. Because the metals prices of metals are going up, evidently. That gets people to spend more money. They're willing to spend more money. Probably everybody did well. I think we did weller than most of the competitors, we frankly have the best product in the market.

And Mark [Colesculain] who runs the business for us is just doing a dynamite job running around the world. We let him take charge of the sales force, a dedicated sales force. He's just doing a tremendous job. At the same time, he's a technical guy. He has a Phd. in Physics. And he added history his whole life in inspection, web inspection. Under his guidance his team has put lots of new capabilities into the product that our competitors don't have. It's just a better product. And the better product, dynamic guy leading it. That's what leading to these results.

Now we just have to teach him how to make more money at it.

That's the next question. It sounds like you're looking at some ways of increasing margins in that business. Can you give us some sense as to whoo you're doing there. Or is it something that always going to be lower margins than the rest of the business?

Yes. It will always be lower margin. We have two kinds of customers. We have Honeywell, who purchases the core elements of technology from us. And the core hardware from us and provides everything else. Other than Honeywell, we have to go to factories around the world and provide the huge metal frames and lighting systems and everything. It's very difficult to get. It will never be. Unless it turns into an OEM business around the world, it'll never have the margins of our MVSD division, though we see increase five to 10 points from where it is now. We have a plan to do that in stages.

5 to 10 points over what timeframe?

A couple of years.

Let me switch gears to Checker. How many distributors do you have right now selling product?

Alright I will look that up now.

36.

36 in the USA.

36 in the U.S. And the plans this quarter for Europe? Is that still ?

I think Europe is signing them up as we speak this quarter. I think they'll end up with 10 or so.

Okay. As you look at your experience so far, you talked about it being a little disappointing

Very disappointing.

Thank you.

You know me, I don't mince words. When it's good news we tell you, when it's bad news, we tell you.

How many folks do you have on the sales and marketing working with distribution? I mean, are you -- where you you in terms of the training of these folks?

We have 5 people on board who are distribution managers, who are experts and -- they have expertise, or claim to have expertise in managing distributors, and we'll see, and signing them up. That's their sole job and to manage them and train them. In addition, every regional manager, we probably have how many regional managers do we have, maybe 10?

No, here in the U.S. we only have 3 or 4.

We have 3 or 4 regional managers. Those managers themselves are responsible for the interface with the distributors on a daily basis. To see what they're doing and to assist them in their selling.

In addition, we have our own salesman at some accounts. There are some accounts that we've reserved for ourselves around the world for selling Checker. We've been there and they know us. They want to buy directly for us. They we want them to buy directly from us. This is a new challenge for Cognex and I'm sure we'll figure it out.

Any plans -- you had, in the last quarter added a bunch of folks, new sales engineers close to 30. That's for the Company as a whole. Are you still adding, Bob? What's the -- ?

I'm looking now.

We added an additional four during the fourth quarter. I mean during the first quarter, I'm sorry. Net four.

Most of the sales we're adding are factory floor guys who are going to sell In-Sight.

Right.

The model is we have In-Sight that's handled primarily by the sales force. And in certain areas where we have no coverage we have selected the distributors out there. Checker is going to be, except for certain house accounts, very few house accounts, will be totally through distribution.

One thing that would help us is we could ever buy a company or get involved with a company that knew how to sell from distribution and manage them and had a great distribution network. And I can tell you we are looking at that kind of company as an acquisition.

Okay. Looking at the factory floor business, it sounds like things are going well there. I wonder, how concerned are you by what you're seeing and reading about the conditions notice automotive markets, the decent size?

It's certainly not a good thing when you read that General Motors is going to lose money or Ford people losing money. One would think that that would have an affect on purchasing. However, the products that we manufacture, that we sell tend to lower manufacturing costs and increase productivity. So it shouldn't have as dramatic effect as one would otherwise think. These are -- the products we sell are not discretionary products. These are products that you need today in order to make things at all in high volume and high quality and low costs. If they have to build plant or refine products and come out with new products every year, as they do. Whether they're making money or not, General Motors is going to come out with another line of cars, right? And every time they change lines, that means more automation. I can't imagine that should dramatically change our business.

It's an opportunity. Some of what they're looking to do right now is to reduce costs and improve efficiency. Our systems are not, multi-million dollar systems or whatever. It's a low-cost method of being able to, you know, easily improve quality in a number of different facets.

And so it flows through if the OEMs, automotive OEMs, meaning the name plate companies. They use the that term as opposed to what we do in semi-conductors. Automotive OEMs, when they're in financial trouble, I assume they get even more aggressive with the suppliers on price. That would increase our our business. That would tend to increase our business. No way there's enough profit margin in the suppliers, vis a vie, the first and second tier suppliers to the OEMs. There's no way that they can just cut price and stay in business. The only way they can cut price is lower their manufacturing costs. The only way to do that, certainly you can offshore, I'm sure they've done those things. The only additional way to do that is by using more automation. That means more business for us. It might be when times are tough, more business for us.

That's -- automotive has always been a decent contributor to In-Sight?

Oh, yes. The last time I saw a pie-chart, it was probably, it was certainly the largest sector. I would say 40, 40% of -- we don't have the number in front of us. But it was certainly the largest sector by far. It was 30 or 40% of In-Sight factory floor revenue.

Okay. One final question if I may. Then I'll hop off.

Yes.

Book to bill was above 1 for the Company as a whole. How about in the OEM business, semi-electronic OEM business?

All right. We're going to look that up. Who put this ho-hum here? We were really good.

Yeah.

I know. I was just too negative. Below --

The semiconductor electronics OEM business was slightly less than 1 to 1.

Okay. Great. Thanks a lot.

Yeah, you're welcome, Jim.

Thank you, your next question is coming from Richard Eastman of Robert Baird. Please go ahead.

Hi, just a couple of questions. I wanted to just touch on the orders number for a minute. If we pull the SPIE lumpiness in out of the quarter. When we talk to the 16% increase sequentially in orders, the numbers probably is going to drop a bit, obviously. I'm curious how that looks geographically. We've heard a lot, recently, in the last 6-8 weeks about, you know, geographic slowdown in parts of Europe and certainly even Japan. I'm curious if you've experienced that any point in the quarter or --?

You're talking about bookings excluding the SPIE bookings?

Correct.

By area. Let's see. Europe was area -- Europe was pretty strong. Europe tends to be just behind the U.S. It was again during the quarter. Japan, a lot in Japan depends upon whether or not you have the semiconductor capital equipment guys going or not. In the first quarter on the non-SPIE bookings, Europe did fine.

Okay. Okay. And then is there -- was there much linearity to the order pattern in the quarter? Did you see -- did the quarter just play out pretty evenly?

Actually was a little bit of a -- March was probably the strongest month in the quarter.

Okay. So you actually saw an increase?

Yep.

And then just one other question I guess. I'm trying to -- when I look at your revenue by geography. Just kind of trying to visualize the moving pieces in the OEM business. But it surprises me a little bit that your U.S. business has been running kind of flattish in dollars for four quarters now. And wouldn't we see, you know, the U.S. In-Sight sales up -- does some of the OEM business just literally, you know, impact the U.S. as much as Japan?

Well, yeah.

The U.S. semi?

We do sell to U.S. semi-equipment makers or whatever. So, while a greater percentage of the total semi-cap equipment is to customers in Japan, we do have a number in the U.S. So the U.S. number is also impacted by that. Especially as take a look waiver I.D. has been a good product here in the U.S. That certainly suffered this past quarter.

So, I guess there is not a read into that, basically have the same moving parts. We have the same products the factory portion of both but we have OEM sales down in the U.S.

Yep.

And then lastly, you said there were no buybacks in the quarter. Is -- the share code is up significantly? Is that just options exed? Up about $1 million or something?

I think it's $1 million compared to -- let's see. I think it is.

It's $47 million. $46 million. That's strange.

Invest anything earlier or anything?

It's a combination of things. I think the -- there were some options that were exercised. But the December quarter was a low quarter. I think it had to do with the price of the stock.

The treasury method.

Yeah. Yeah. As a matter of fact, Richard, if you look at April 2004, it's about 48 million -- 47 million shares.

Okay.

That's the treasury method of calculating it.

All due to the diluted stock options.

You didn't invest anything early, did you?

No.

No.

All right, well thank you.

You're welcome.

Thank you. [OPERATOR INSTRUCTIONS] Your next question is comes from Mark Roberts from Roberts and Company. Please go ahead.

Thank you, good afternoon.

Hi, Mark.

In looking -- I realize this is somewhat unscientific. In looking through like Automation Magazine and some of these, I'm noticing a increase in the number of ads for machine vision systems from competitors, some of whom I've never heard of before, and they're showing up in ads. Are you seeing a level of increase in competition for applications that -- applications that you would use In-Sight for in the marketplace?

I have not. But that doesn't mean there aren't such things. I will tell you that -- that the visibility of machine vision is now much higher throughout Company the in the world, because, of course, younger people have graduated college and are now in positions, and they've learned about machine vision. So it doesn't surprise me that companies, and there are always, there are many, many companies always in the past. That they're now advertising. I will be going to a vision show shortly in San Jose, looking at some of these companies, seeing if there's anything to acquire.

From what I hear from the sales force, the largest competitor, there is just two players in the U.S. It's us and DVT to speak of so you see ad for DVT. They spend a lot of money on markets and distribution. They tend to be the strongest competitor. I haven't seen any other ads but I can't say that there aren't more of them.

By the way even if you take our shares and DVT combined, still other tiny players that add up to quite a bit also. Machine vision still tends to be a very geographically based kind of business. In every geography there will be a couple of guys putting something together and working with factories. And those tend to be competitors too.

So I don't mean to say by any account that we have 50% market share, even with DVT. I think us and DVT is probably 30%.

It is your perception, based on the feedback from the marketing guys, across the board, are you holding market share, gaining market share or slippage in the market share?

Well, that's a good question. If you read the press releases of DVT, you think they're increasing market share. We're certainly growing, quarter on quarter, on factory flow very nicely. I would be surprised if we're losing market share. At worst, we're holding. At best we're gaining. That's what I think. And with Checker, with Checker we will dominate it. But that's not seeming to happen right away. [ Laughter ]

Okay. My last question is with the growth of more and more basic manufacturing in text tills and paper and metals in China, when do you think that China will represent 10% or more of the Surface Inspection revenues?

That's a very good question. China clearly is becoming an economic powerhouse. A lot of people don't seem to recognize that s that going to be America's number one economic competitor in the world. Not only for product but for jobs. People should be very worried about China. I'm is not sure what to do about it.

It's an unfair playing field, in that American industry is burdened. I know this isn't your question, but I have the microphone, okay?

American industry is burdened by regulation, regulation of water, air, employees, and Sarbanes-Oxley, just burdened by regulations. I'm not saying that they're good or bad, but boy, it's very costly. We spend a lot of money on this stuff and internal time. The Chinese have none of that. I recently returned from a trip to China and I can tell you, it is a Wild West of capitalism. The Wild West of capitalism. The government gets out of their way. The government doesn't care how many hours people are putting in, or labor conditions.

It's truly unfair. And I don't believe in free trade, I believe in fair trade. Right now we're in an extremely competitive fight. We will have to do something. I believe the tariffs are the appropriate thing.

But having said that, when China will be 10% of the SPIE's business, couldn't tell you. Couldn't tell you. But -- China happens to be very big in metals now and steel production, but I don't think in paper in most of SPIE's business is still paper. So I don't think China is going to be a large piece for quite some time.

Okay. Great, thank you very much.

You're welcome.

Thank you. Your next question is a follow-up question coming from Jim Ricchiuti of Needham and Company. Please go ahead.

Quick question on the OEM business. Any sense on where your customer inventories are?

Yes. In the OEM business our largest customers still have as I recall, --

Three.

Three months?

Three months or so of inventory. There's a couple of outliers on our legacy product, where it's their older equipment that they're not getting the great sell through that they might have a little bit more. For the most part, it's around three months right now.

Can you -- say what the increase was sequential increase in bookings in the OEM business?

In bookings? You want to know the ratio?

I think you guys --?

Bookings Q1 OEM over bookings Q4?

Right.

Yeah, I think we can give you that. You want semiconductor or semiconductor in electronics?

If you have both.

You're asking for a lot there, Jim. I want to continue with another question.

Bob, you alluded to acquisitions. I want to put that question out.

9% is the increase in bookings in our semi-electronic OEM sector combined. 9.7%.

9.7?

9.

It was a percentage of 9%.

Got it.

Nice increase, but on a very small number.

Yeah. Yeah. Just a follow up, just on your -- you you talked a little bit about acquisitions. In the last call you said that you were looking at some things, including something that sounded a little more sizable. I'm wondering where we are on that?

We're in the process of due diligence. We expect if things go the way we're thinking, sometime in May or June this will be completed.

Great, thank you.

Yeah.

Thank you. At this time, there are no further questions. I'd like to turn the floor back over to the presenters for any closing remarks.

Well, are there any other conference calls going on? We can take those questions, too. We're pretty good on questions. They may not be right, but they're enjoyable to listen to.

That's it. I hope that next quarter will be a bit more exciting, again, only on the positive vein. I have no reason to believe that it will be anything but positive. Look forward to talking to you, and perhaps, entertaining you about three months from now. Bye bye.

Thank you. That does conclude today's teleconference. You may disconnect your lines at this time. Have a wonderful day.