Cineverse Corp (CNVS) 2009 Q3 法說會逐字稿

Good day everyone and welcome to the Cinedigm Digital Cinema Corporation third quarter fiscal year 2009 earnings conference call. Just as a reminder, today's call is being recorded.

Listeners are cautioned that some of the material discussed today may include forward-looking statements regarding Cinedigm's Digital Corporation's business and expected financial results. Words like anticipate, believe, estimate or expect or are generally forward-looking statements.

Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they are based on information currently available in certain functions and there can be no assurance that they will be proven correct. You should not rely on anything in these forward-looking statements as a promise or representation as to the future results.

You're encouraged to read the Company's Securities and Exchange Commission filings. At this time, I would like to turn the presentation over to your host, Mr. Bud Mayo, Chief Executive Officer. Please go ahead Mr. Mayo.

Thank you operator. Good morning everyone and thank you for joining us today. The dimes third quarter fiscal 2009 investor conference call.

As you hopefully already know, Access Integrated Technologies is changing its name to Cinedigm Digital Cinema Corporation. And I will be referring to the Company by its new name throughout the call. With me today as always are Brian Pflug, our SVP of Accounting and Finance; and Andy Patel, our VP and Treasurer.

Before I begin, let me give you an overview of what we plan to cover on the call today. First, I'd like to quickly touch on the rationale for changing our name. Second, I will provide an overview of our financial results.

Brian will then offer the financial results in more detail after which I will walk through an update on our six-point strategy leading up to the Phase II deployment. Finally, I will talk a bit about our balance sheet and liquidity position and why we believe we're well-positioned to weather uncertainties in the market.

I wanted to talk today about our name change because it represents a milestone for the Company and a shift in our marketing strategy specifically toward consumers. Cinedigm is an abbreviation of the phrase 'a new paradigm in cinema.'

And we want all consumers, all over the world, to recognize our brand and equate it with something better than movie theaters. Our mission and the ultimate benefit of Digital Cinema as I have been saying for years is to bring a whole new experience to theater-going audiences, in other words to change the paradigm of the theater experience.

About six months ago we realized that our marketing program needed to reflect this consumer benefit more directly and more closely. In addition to the name change, we've significantly updated our website and have also begun a much more aggressive press program to build recognition for the Cinedigm brand and more importantly, the benefits that Cinedigm and digital cinema more broadly bring to consumers.

As all of you know, we have been working diligently for six years to make digital cinema a reality. And in the last few months, we've only just started to see the potential for what digital cinema can deliver.

In addition to our own groundbreaking programs, as the digital cinema leader, Cinedigm has enabled thousands of theaters in 40 states to make the decision to add 3-D capability and take advantage of the enormous slate of 3-D content in 2009 and beyond. On January 8, we utilized our CineLive network to broadcast the BCS championship game live in 3-D to 80 theaters in 35 states across the country. This was the first ever live 3-D broadcast to paying consumers on a national basis.

The event was amazing. And the financial results were extremely encouraging. Theaters in multiple states were sold out. Concession sales were very high and consumer reaction was very positive.

Cinedigm's mission is to transform theaters into entertainment centers that can offer choices of programs moviegoers have never seen before. Without question, the BCS broadcast is a great example of this transformation.

Clearly one of the major achievements that this BCS broadcast demonstrates is that live digital Cinema is now a national phenomenon. We are proud to be by far the leader in this transformation, having converted about 70% of the digital streams in the USA, providing alternative content to all of them and more importantly in some ways to many more theaters whose digital equipment others have installed.

We firmly believe that as the universe of digital cinema screens grows in response to 3-D or any other catalyst, so will Cinedigm. We also announced earlier this month we have recently passed the 10 million mark in total show times played on the almost 3800 and growing systems we have installed throughout the nation.

This too demonstrates the critical mass that we're now achieving on a nationwide basis. So our name change and the other actions we are taking are reflective of our leadership and bringing new experiences to theater-going audiences. And we continue to be very excited about making our mission a reality.

Now I'm pleased to provide an overview of some of our financial highlights. First let's discuss our Media Services segment.

We have seen a 10% increase in our year-over-year revenue versus last year and a 4% increase in total revenue from Q2 to Q3. Virtual print fee performance was up 28% year-to-date and satellite transport revenue was up 55% year-to-date versus last year.

This quarter marked the third in a row for positive EBITDA for the transport division in fact. Shifting to our Content & Entertainment segment. Our entertainment group which we used to call The Bigger Picture, increased revenue 27% year-to-date over last year. This is primarily a result of an increase in the number of programs distributed and sponsorships for those programs.

Unique Screen Media's on-screen advertising revenue showed some progress, a 19% quarter over quarter increase, primarily due to its contributing role in the acquisition of alternative content programs for the entertainment group to distribute. In the Content & Entertainment segment as a whole, we saw a 21% reduction in the year-to-date EBITDA loss, a direct result of decreased expenses of over $2 million year-over-year.

For the third quarter, the year-over-year adjusted EBITDA loss was reduced by 60% compared to last year. This relatively new content in the entertainment segment -- but an important part of our business is more affected by the economy because it is driven by advertising and sponsorships revenues.

However, it has emerged as an enormously strategic piece of the business in promoting Cinedigm's leadership in digital cinema and in building our consumer directed brand equity around the world. By utilizing an already deployed asset base, we can bring a growing number of new and exciting alternative content choices to exhibitors and their customers and we can generate new revenue streams for ourselves and our exhibitor partners.

The use of our unsold advertising revenues is beginning to be of great use in supporting not just the promotion for but also the acquisition of major programs that only Cinedigm can deliver. Now let me speak about the consolidated results.

Despite the challenging economic environment, we're pleased to be able to say that gross profit margins were maintained at the same level as last quarter. We're even more pleased to show that the year-to-date EBITDA margin increased to 49% versus last year's 36%. This is the result of continued tight management of SG&A expenses across all business units at the Company.

Turning to our debt and cash flow, we have been amortizing our GE credit facility for (technical difficulty) as well as interest during the period from BPF revenues alone with cash flow to spare. Our senior notes, on our senior notes we paid interest in cash rather than stock for both September and December quarters and intend to make every reasonable effort to continue to do so until we refinance these notes when or before they are due at the end of 2010 or early 2011.

We have continued to generate cash flow from operations for the last several quarters and we finished the quarter with essentially the same cash position as the prior quarter with nearly $23 million after making debt service payments of $11 million during quarter. Even in a tough economy, we're generating enough cash to satisfy our obligations.

This is a very important point that I'll come back to later. At this point, I would like to turn the call over to Brian who will comment further on our latest financial results. After Brian's presentation, I will return with further remarks and then open the call to questions. Brian?

Thanks Bud. Our total revenues for the third quarter ended December 31, 2008 were $22.7 million, bringing us to $65 million year-to-date. This represents an increase of $1.2 million or 6% from the prior year's third quarter and an increase of $6 million or 10% on a year-to-date basis.

We also saw a slight increase from our fiscal second quarter's revenue of $0.9 million or 4%. The increase in our reported revenues from last year's quarter and year-to-date periods continues to be driven by our Media Services segment which increased by $1 million and $8.4 million respectively due to virtual print fees and movie deliveries attributable to our completion of our Phase I rollout in the prior year.

Our Content & Entertainment segment also saw a small revenue increase of $0.3 million versus last year's third quarter due to theater advertising used by content providers at the Bigger Picture as part of the agreements to distribute alternative content. However, the content segment as a whole declined by $2.3 million on a year-to-date basis versus the prior year due to our elimination of various underperforming customer contracts and due to continuing economic factors impacting the advertising industry as a whole.

Our adjusted EBITDA increased to $11 million for the quarter from $8.4 million last year, a 30% increase and to $32.1 million year-to-date versus $21.4 million last year-to-date, a 50% increase. The quarterly EBITDA was consistent with our second quarter's results of $11 million.

Our Media Services segment EBITDA increased from $11 million in last year's quarter to over $13 million this year, a 19% increase. This performance was also due to the digital cinema business which has high EBITDA margins and ongoing cost containment in other areas.

Also the Content & Entertainment EBITDA loss was reduced from the year ago period to just over $300,000, an improvement 60%. It should be noted that adjusted EBITDA has exceeded all of our interest expense fro the last seven quarters, a trend we expect to continue.

Our direct operating costs, while up slightly this quarter, are consistent with the prior period at about 31% of revenue and are down slightly in the year-to-date period due to continued careful expense management. Our resulting gross margins stand at 69 and 70% for the quarter and year-to-date period and from 69 and 66% in the quarter and year-to-date period last year and 69% last quarter.

Our overall SG&A expenses have declined fairly significantly versus last year and as a percentage of revenues dropped from 28% of revenue in last year's quarter to 21% this year. The major cause of this was a consolidation of sales and other personnel within the advertising business, personnel reductions throughout the Company and ongoing cost containment efforts. Our total Company headcount was 251 as of December 2008 versus 309 as of December 2007.

This quarter also includes a nonrecurring charge of $6.5 million for the impairment of goodwill on some of our previously acquired Content & Entertainment businesses. Due to the decline in market capitalization of our Company and many others and economic conditions generally, we performed full impairment tests for our goodwill containing units as of December 31, 2008.

The write-downs were primarily centered on our advertising unit at the Vermillian Theater resulting from revised forecasts and other assumptions used in evaluation and due to the diminished market attributes of some of our identified peer companies. Before the $6.5 million non-cash impairment charges I just addressed, the third quarter's consolidated operating income year-over-year improved significantly from a loss of 5% of revenue to income of 7% of revenue this year and held steady quarter over quarter at $1.5 million. This is attributable to modest revenue growth coupled with aggressive expense controls which are continuing throughout the Company.

Our interest expense was nearly $800,000 lower this quarter versus last year due to our fixed rate on the GE facility effective August of '08 and the fact that we paid down approximately $10 million of the principal balance through December. Year-to-date the interest expense is slightly higher as the full balance on the facility was not outstanding for all of last year and our senior notes which are issued in August '07. Interest expense this quarter was slightly lower than the second quarter.

While the interest rate swap locked in a fixed rate of 7.3% on the GE debt resulting in lower interest versus the prior periods, we recorded a non-cash charge of $5.4 million to reflect the change in fair value of the swap contract. This charge resulted from the recent decline in LIBOR rates and the projected outlook for LIBOR rates remaining below the Company's 2.8% fixed LIBOR rate under the contract.

We expect further volatility in this line item either up or down as the interest rate environment undergoes further change. However since we intend to hold this swap until maturity, we do not expect to realize any cash losses on the contract.

Our net loss of $17.4 million for the quarter versus $8.4 million in the prior year excluding the impairment charge in and the marked to market accounting on the swap contract, our net loss would have been reduced to $5.5 million. In fact the Media Services segment had positive net income in both the quarter and year-to-date periods excluding the swap item. The current quarter's loss includes $22.3 million of non-cash charges, more than our reported net loss.

The December 2008 quarterly loss includes $6 million of cash interest primarily associated with the GE credit facility and our Phase I subsidiary plus $0.9 million of non-cash interest. The balance sheet reflects cash of just under $23 million and working capital remained at approximately $11 million, a level consistent with last quarter.

As expected, without any Phase II purchasing activity to date, our recorded asset amounts have declined due to normal depreciation, improved receivables management and now of course due to the goodwill write-off mentioned earlier. The full quarterly report to be filed shortly will give further information including positive operating cash flow of $22 million for the year-to-date December period. With that, I'd like to turn the call back to Bud.

Thanks Brian. The third quarter of fiscal 2009 as well as the first few weeks of the current quarter has been a tremendously exciting time for Cinedigm. Not only did we change our name as I mentioned earlier, but we broadcast the first ever nationwide live 3-D sporting event to paying theater audiences.

While the economic climate is a remaining a challenge to many including some very well-established companies with much longer histories than ours, we are continuing to expand the uses of our existing national digital cinema asset base to create value for all those we do business with, exhibitors and content owners and most importantly for our shareholders.

As I mentioned on our last call, the credit markets and the surrounding economic uncertainty are too significant for us to be able to offer meaningful guidance for the coming year. But we continue to be highly disciplined in our expense controls and the use of our industry-leading digital cinema platform to increase revenues organically without significant additional capital investment.

In November I laid out our strategy for Phase II deployment, keeping in mind the tough climate in the financial markets. Here's an update.

Number one, to sign exhibitors to our Phase II national license agreements and tee up thousands of installations with site surveys and site preparation so we can move quickly as soon as the credit lines from any sources open up. The update -- we have signed almost 500 screens to date and expect to add significantly in the months ahead especially with the [NATO] Cooperative Buying Group or, CBG, as described later.

Number two, to sign supply agreements with all major hardware vendors to lock in competitive pricing and continuous supply as we did in Phase I. Update -- two are complete, [Barco and Kristy], and two more are in the works.

Number three, to continue to sign movie distributors to VPF agreements as we did in Phase I. Update -- we have five studios signed and expect at least three more in the coming months.

Number four, to work with hardware vendors and interim financing sources to secure enough debt to allow Phase II installations to begin immediately on as large a scale as possible beginning in the third quarter. Update -- we began installing systems for premier theaters in October and these will continue into the fourth quarter with the $8.9 million financing already in place. Progress is being made to add significantly to funding plans for Phase II.

Number five, to advance our program with the CBG to accommodate each of its members' 8000 screens in all categories with a target to become begin signing MLAs for many of its members in the March quarter. Update -- we have made great progress with the CBG and its management team who has chosen Cinedigm as its integrator.

In our joint discussions with studios to make some accommodations for the several hundred smaller theater throughout the country, we do not play so-called first-run movies. We hope to complete all the necessary additional documentation in time to address CBG's members at Show West at the end of March and begin the process of signing both first-run and smaller theater chains to our Phase II plan in the spring.

And finally number six, to redouble our efforts to bring compelling national recognized programs to our exhibitors in live 3-D in the March quarter. To do this, we plan to utilize our proprietary CineLive network along with our nationwide advertising and marketing reach.

Update -- we had a very successful launch of the Fox BCS championship game in 3-D followed by a live Fallout Boy concert in 2-D also in January and we will present in February, on February 14 the TNT NBA All-Star Saturday night program in live 3-D throughout the nation. Our goal is to bring five or six more national live events and 20 to 25 other programs to theaters this year.

In no uncertain terms, Cinedigm is making history. The BCS championship game in January was a huge success. 80 theaters in our CineLive network provided the event to fans and 19 locations were sold out. Grosses for the event were on average more than four times higher than the best per-screen movie gross for the same evening.

On February 14 we will make history again with TNT by providing the first ever NBA nationwide event delivered to even more theaters in live 3-D than the BCS including our first theater outside of the United States in Toronto. These events will require our exclusive CineLive product which enables the broadcast on our nationwide satellite of both 3-D and 2-D live events.

As I mentioned during the financial highlights, Digital Media Services, our transport and delivery unit, continues to be a significant driver of Company growth. For the the fiscal 2009 to date, this division delivered features from 14 distributors including our own entertainment group in trailers from 16 different distributors.

These totaled more than 11,000 feature deliveries and more than 56,000 trailer deliveries to digital cinema equipped theaters throughout the US and Canada. Our theater command center software and library management server are now supported more than 10 million shows and continue to be by far the most widely used and reliable theater management system in the world. This technology is now being deployed in Ireland and are available throughout Europe and Asia through our distribution agreement with Doremi Lab.

At Unique Screen Media, we're working to combat the challenging economic times by using our available on-screen advertising inventory to acquire alternative content as well as to promote the Cinedigm brand. As mentioned earlier, we as a Company are looking to brand Cinedigm to the consumer and in the process to increase awareness of our alternative content events.

Let me conclude by addressing the issue of liquidity, a subject everyone is concerned about today and rightly so. Firstly, our relationship with GE Capital has been excellent and we expect to create ways to build on our history together as we begin our Phase II deployment.

We applaud and appreciate GE's commitment to digital cinema and their contribution to the unqualified success of Cinedigm's Phase I deployment plan, by far the world's largest. We are in compliance with all of our financial covenants and our loan agreements and we do not anticipate breaching these covenants.

Secondly, our balance sheet remains strong and we believe with our cash reserves and expected cash flows we can meet our obligations through at least the next year unless there is a significant and unanticipated decline in our revenues or other unforeseen events. Finally, recurring revenues from our investment in a very large digital cinema asset base during a far more robust market is paying off today from long-term contracted VPF and other revenue streams.

These revenues and their proven predictability in an industry that thrives despite recession have become the lifeblood of our business. In fact, revenues from these assets directly or indirectly (technical difficulty) produced about 70% of our revenues this year.

2009 will be a challenging year for most companies due to the continuing uncertainty in the credit markets and other factors. However, we continue to be confident and even optimistic about our ability to operate our business more effectively and more efficiently even if we are unable to secure Phase II funding which we view as incremental.

Despite the challenges ahead, 2009 will be a pivotal year for Cinedigm as we leverage our national platform to drive transformation of the theatergoing experience. We look forward to announcing and delivering more exciting events to consumers and we hope you have a chance to join us in person at some point during the year.

Now, I would like to open the call to questions.

(Operator Instructions) Richard Ingrassia, Roth Capital Partners.

This is Jerry (inaudible) filling in for Rich today. Question for you guys. What are your alternatives if debt capital is not available to you until calendar year 2010?

Our alternatives really all fall into the same category, to build the business organically and to exploit the asset base we have already installed and to growth that business in meaningful ways through the distribution of additional content, through building our software business and to increase the number of deliveries we make to theaters as we have.

Thank you. And next year will the live broadcast events be priced and marketed to attract a larger audience and therefore becoming more attractive to advertisers?

Yes, the model is very sponsorship driven and it is not totally dependent in any way on the box office. So we will be visiting the box office pricing guidelines that we provide to exhibitors as we move forward.

(Operator Instructions) Scott Preston, Maven.

Bud, a couple of questions. First off on the balance sheet, what's the preferred stock proceeds? What's that originate from? It was like $2 million I think?

We will be describing that in more detail in the Q which will get filed either tomorrow or Monday. But just a quick overview, that is a subscription from a strategic investor who is a movie producer and it is a very attractive piece of financing for the Company.

Okay and is that included in the shares outstanding or is that --?

It is not. It is a Class A preferred separate piece of equity.

Okay, and does that carry an interest rate on it?

It carries a cumulative dividend of 10% that begins to be paid either in stock or cash at our option at the end of 2010.

Okay, 2010. And then also on -- looking at the balance sheet, you guys had $24 million in short-term I guess debt coming due in the next 12 months. Can you walk through how that comes due through the quarters? Is it more kind of near-term loaded or is it --?

It begins to increase as the interest rate begins to abate. They're designed to be kind of related to one another on an amortization schedule. So as the balance goes down, the interest goes down, the principal goes up. So it's a fairly steady flow. That was blood blood Bud. Brian, you could add some color to that (multiple speakers)

Should we assume like $7.2 million a quarter comes out of that? I mean it will kind of stay constant I guess because more is going to come out of the long-term debt but --

It will go up slightly as the quarters go. There is no big balloons or anything that are due in any one quarter. So it's a pretty constant amortization rate so that -- for modeling purposes, that could be reasonable.

The impairment to goodwill in the quarter, was that from -- what is that related to?

That was mostly the advertising business and secondarily the Pavilion Movie Theater.

Okay, why the Pavilion Movie Theater was impaired?

Well we decided to revisit all of our goodwill containing units given what is happening out there in the marketplace and as Bud said, these two businesses are very consumer centric and we revisited our forecast. But it's also -- probably half of it is driven by market factors completely outside of any performance that the units are doing.

We also have to look at the market attributes of other companies in the same sector and look at what is going on with them because part of this is driven by the market multiples and what could the businesses be sold for down the road. So all of that gets valued compared to what we have on the books and if there is a shortfall, there's an impairment charge.

Okay and then a final question. What was CapEx in the quarter and what is the budget for the next 12 months for CapEx?

We don't publish that information. I can tell you that it is minimal.

What was it in the quarter?

(multiple speakers) that readily available (multiple speakers)

It will be in the Q in the statement of cash flows.

It's not a big number.

George Grose, American Capital Partners.

Good morning. Bud you mentioned that you're going to keep doing cash interest payments there. How do you balance that with I guess the ongoing capital commitments and also the -- what you have to pay down on your debt there?

What ongoing capital commitments are you --

Well I mean the general business operations there.

Oh, you don't mean CapEx then? You're talking about our cash requirements.

Yeah.

Well, it's no question that it's tight. Making those payments is a challenge and it is one of the reasons we did that preferred stock deal that is referred to on the balance sheet. It's to give us that extra liquidity.

We would rather do deals under the market and meaning better than the market with strategic investors in small amounts and use the proceeds to make that payment rather than see that stock back in the market as soon as we issue it as interest. So to the extent that we can and feel that it would be prudent to do so, we will take advantage of some of those kind of opportunities from time to time; anti-dilutive, solid, strategic type investments by others with whom we can do a lot of business and actually who can make a difference to Cinedigm on the distribution side. And we're talking about films and other content, independent films and other content that we intend to begin distributing this coming year.

Is there -- I guess do you see a possibility where down the road where maybe you can add more of these kind of preferred financings or at least like from this investor do you think you could get more or you have other investors lined up that could provide similar type of financing?

I'd rather not speculate for obvious reasons on what the opportunities are. We know there's a great deal of interest in doing that and the reason we are interested in doing this is because if we do get investment dollars, we're looking to do business with somebody that is going to add to the value for the rest of our shareholders.

We want to do an anti-dilutive kind of financing if we do any at all. But the motivation on both sides needs to be that there's something about that investor that can actually improve the organic growth potential of Cinedigm. And really those are the criteria that we try to apply when we look at this.

I don't want to speculate what we're going to do in the past. We're very happy and I think that when you see the terms in the Q, you've be very impressed as well. But it's a very heads-up investment for the Company.

Okay and then in terms of cash from operations, I think last quarter you did $6.5 million. Could we assume you did about the same thing this quarter?

Yes.

We have had pretty steady results on a cash flow basis from operations. And if you cut through these non-cash extraordinary charges like the impairment charge and the charge on the interest rate swap which I still don't quite understand frankly from an accounting viewpoint but it's necessary, we are really doing okay. We're never satisfied and we're never going to be satisfied with the results that we develop because we always feel we can do better and we're going to do everything we possibly can to make sure we do.

Last, I mean like your SG&A went up about $500,000 sequentially. What was that due to?

We had some events that had -- that occurred during the quarter, particularly a large trade show. Also some -- as year-end starts to creep up on us here, we do have some SOX compliance activities and increasing amounts of audit and professional fees that we are incurring.

(Operator Instructions) Private Investor, [Alan Cortelli].

Yes, Bud I recently significantly -- recently in the last year and a half increased my number of shares that I own of Cinedigm now and what induced me to significantly increase my personal investment was I can't remember who the private equity firm was that invested $1.5 million and they issued something that said they were number one.

They had done some discounted cash flow analysis and said that the value of Cinedigm was I remember $5.00 and they said they were going to work rigorously with management to not dilute the existing shareholders and that was the reason I even invested more money. And naturally the stock price even dropped further.

My question is, is that discounted cash flow number of $5.00 still a reasonable number? And secondly, are your intentions not to dilute existing shareholders?

First of all, I can't comment on the valuation from somebody else. We don't put that kind of information out.

We certainly would agree that our stock is grossly undervalued. And certainly there isn't anybody at Cinedigm who doesn't feel that way and all of our stakeholders, all of our stockholders. With respect to -- what was your second question, excuse me?

That investor, I'm sorry I can't remember who that equity firm was and they're probably on the phone call right now because they invested I believe $1.5 million, they said they were going to work diligently with you, your Company, to make sure you tried your best not to dilute existing shareholders.

And that is absolutely the case. Dilution is in the eyes of the beholder sometimes. Certainly we're not interested in selling our common stock in this market at anywhere near these prices.

So it is always a challenge for a company in this environment to make sure that it has all it needs to continue some level of momentum and I think that we have certainly done a decent job of doing that even in the worst economy any of us has seen in our lifetimes. We will continue to do that and consider anti-dilutive types of small investments from time to time as we did with the preferred which I would consider anti-dilutive and very helpful to all of the common shareholders.

But we certainly -- the statement I made earlier had to do with -- and again it doesn't apply today because the price is simply too low to do anything meaningful with our common stock. But if you issue stock at any time, the definition of dilution to a management team is is it improving the value of all of the other existing shares. And if it does, then maybe the decision is yes to go forward.

It's kind of a no-brainer in this environment for the Company because the stock is so depressed as it is for most companies. Our job is to take what we have which is a very substantial industry-leading asset base and make that work for us, exploit it, get as much out of it as we can and that is exactly what we are doing now.

Thank you for that answer and we are praying that you're going to be successful, Bud.

(Operator Instructions) At this time there appears to be no further questions in the queue. I would like to turn the conference back over to our presenters for any closing remarks.

Well I just want to thank you all for joining us today and to tell you that I will be presenting at the Roth conference in a couple of weeks on February 17 at (inaudible) California and hope to see some of you there. Take care and have a wonderful day.

That does conclude our teleconference for today and we would like to thank everyone for your participation and have a wonderful day.