Everi Holdings Inc (EVRI) 2011 Q3 法說會逐字稿

Good day ladies and gentlemen. Thank you for standing by. Welcome to the Global Cash Access Holdings Incorporated third quarter 2011 conference call. During today's presentation all parties will be in a listen only mode, and following the presentation the conference will be open for questions. This conference is being recorded today, Wednesday, November 9, 2011, and I would now like to turn the conference over to Julie Yusgart, Treasury Manager. Please go ahead.

Thank you, Douglas, and welcome everyone to GCA 's third-quarter 2011 earnings conference call. Joining me on today's conference call is Chief Executive Officer, Scott Betts; and Chief Financial Officer, Mary Beth Higgins. On today's call, Scott will give an overview on the Company's progress and then Mary Beth will provide a brief update on our financial performance in the third quarter and review our guidance for 2011. Following these comments, we will be happy to take questions. A few important items before I turn it over to Scott. First, we have posted our earnings release and our unaudited financial statements to the Investor Relations section of our website at www.gcainc.com for anyone who needs access to that information.

Also, during this call, if we use any non-GAAP financial measures for references, we will put up the appropriate GAAP financial reconciliation on our website. Finally, a replay of today's call will be posted on our website around 5.00 PM Pacific time and will remain there for approximately two weeks. As we begin, let me remind everyone that today's discussion contains forward-looking statements based on the environment as we currently see it, and are subject to a number of risks and uncertainties. These include, without limitation, statements regarding market and segment trends and conditions in the cash access, kiosk and gaming industry for 2011 and future periods.

Our belief that we are positioned to grow our business in 2012 and beyond, the impact of our pending MCA asset acquisition on our business, the impact of the Durbin Amendment, recently announced changes to rules and regulations regarding the interchange reimbursement structure for ATM transactions, and other uncertainties regarding network fee changes on our business, our projections and guidance regarding cash, EPS, EBITDA, and other financial metrics, our product pipeline, regulatory approvals for new products, our competitive position and our intention to use free cash flow to repay debt. For factors that could cause actual results to differ materially from those described in our forward-looking statement, we refer you to our SEC filings and the risk factors set forth therein. With that, now let me turn it over to Scott.

Thank you, Julie, and welcome to the call today. I'll start off the call by jumping right into what are probably the key issues that are on everybody's mind, the MCA acquisition, Durbin results, and current industry trends. First let me state that we feel very positive about our go forward position at GCA. We believe 2012 will be an important growth year for us, and we are seeing increasing evidence that the segment has not only stabilized, but is experiencing modest growth. We have very positive visibility into the two factors that will impact our performance most, that of contract renewals and the impact of Durbin, and as you will see, our initiatives are taking hold in the marketplace also.

The basis for our improved outlook is, first, the underlying segment trends continue to solidify. We have now seen three quarters of stability, and in fact have seen the total same-store dollar volume, our best measure of the industry, grow in the last two quarters by about 3.9%. So it appears we've turned the corner on the recent industry trends. In the near term, we see a more stable and predictable industry, perhaps growing modestly in the low single digits, with both same-store volumes as well as new openings contributing to this growth. Second, we have terrific visibility into our business over the next year or so.

At this point we have visibility on over 80% of our revenue through 2012, significantly reducing our risks and exposure to pricing and contract renewals as we move forward, and importantly, based on the results for October, the first full month of its implementation, the impact of Durbin matches the estimates we discussed on our last call, removing much of that uncertainty. Additionally, we are pleased about our recent announcement of our intent to acquire certain assets of MCA, which we expect to close later this month. Let me provide some thoughts to keep in mind as you assess this acquisition. I believe this is a good deal for GCA, both tactically as well as strategically.

MCA approached us a while back and we were able to reach a deal that made sense for GCA. This is not a material deal for us on our cash standpoint, and you will see in our year-end filings that cash at closing will be around the $10 million range, with some contingencies payable over the following year. So we feel we bought it right, and we get significant equipment assets and contracts going out 30 to 60 months. From a strategic standpoint, we believe getting Caesar's back is in the best long-term interest for GCA, and we certainly welcome them back as a customer. GCA has much changed since Caesar's decision to leave, both in service offerings as well as technology and products.

So it's good to have a tough customer back, assessing our progress, and we are confident we have a lot of value to bring to this relationship over the next couple of years. Doing this deal also allows us to affect change in the category and transition these customers back in an organized fashion and on our agenda. This allows us to level the playing field for the next contract renewal process. While you always have to win business, incumbency is also always positive. Lastly, the technology we have acquired in the areas of kiosk design and the ability to leverage our other initiatives across the larger base, and in our data products, has the potential to make this deal even better over time.

If there is a downside, it is the obvious low gross margins that this portfolio has, and while this was reflected in the deal terms, it will have a dilutive effect on our overall gross margins moving forward. Worth noting, this margin situation should give you some insight into how we view the sustainability of some of our other competitors' pricing schemes. As they continue to labor under increased burden of licensure, low portfolio pricing, and the lack of scale, make no mistake, this is a scale business, and I believe this will pose an increasingly difficult situation and risk for potential customers to ignore. We remain dedicated to our continued focus on adding value and innovation as the cornerstone of our strategy moving forward. With that, I will turn it over to Mary Beth to review the Q3 results, and I'll wrap up with a few comments on our progress in some of our key initiatives and our view of the future. Mary Beth?

Thanks, Scott. Good afternoon, everyone. I want to take a few minutes to discuss the quarter end results, the Durbin impact, and the recently announced MCA acquisition. The story of our Q3 results is stability, visibility, and near term growth. Our guidance has been based on a stable, flat run rate through the first three quarters with a step-up in Q4, and all indicators suggest that that is indeed the case. In terms of stability, let's review EBITDA gross margin and operating expenses. EBITDA, adjusted for non-cash stock comp, was $13.3 million for the third quarter of 2011 and $14.1 million when adjusted for some nonrecurring expenses of approximately $800,000.

This result was very close to both the first and second quarter when EBITDA was $14.1 million and $14.3 million, respectively, ahead of adjustments. The $800,000 of nonrecurring expenses were comprised of approximately $0.5 million in legal expenses, some of which were related to the recent MCA acquisition, and approximately $300,000 for the sale on some obsolete equipment. Our gross margin was $29.9 million, or 21.9% for the third quarter, compared to approximately $29.2 million, or 21.7%, for both Q1 and Q2. Operating expenses exclusive of noncash stock comp were $15.8 million for Q3, and after the effects of the $800,000 in nonrecurring expenses mentioned previously, compare favorably to the $15.1 million in Q1 and Q2.

Cash EPS plus equity comp was approximately $0.08. Adjusted for those nonrecurring items, cash EPS was $0.09 for the quarter. We are seeing positive indicators across many of our metrics. Looking at same-store dollars dispensed, our best measure of industry, we have now seen stable, positive year-over-year comparisons on seven of the last nine months, and as Scott mentioned, the last two quarters have grown at a rate of approximately 3.9%. Our results mirror this. During the third quarter of 2011, excluding Caesar's, the Company posted year-over-year revenue growth in its base business.

To illustrate this point, year-over-year revenue declined $15.2 million in Q3, of which Caesar's accounted for $21.3 million in 2010, and approximately $300,000 in 2011. Therefore, revenue, exclusive of Caesar's, was actually up by $5.8 million. While this is not a same-store metric, it is very encouraging. ATM revenue, excluding Caesar's, increased 3.5%, as Caesar's 2010 revenue was $11.1 million and total Q3 ATM revenue declined by only 8.7%. From a mix standpoint, all comparatives did nicely. The majority of the revenue improvement on the same-store basis came from debit and ATM segments, which increased approximately 10% and 4%, respectively.

Credit was essentially flat, down only 0.4% for the quarter. Our check warranty product also showed modest growth, up by about 1% compared to the prior year's results for the third quarter. Q4 revenues for Western Money Systems continued to show good sequential, and year-over-year growth at $6 million, an increase of $3.1 million from the third quarter of 2010. The revenue from Western Money Systems in Q1 and Q2 was $3.5 million and $4.2 million, respectively. As I noted earlier, our overall gross margin for the third quarter was 21.9%, in line with Q1 and Q2 of approximately 21.7%, but a decrease from approximately 24% for the nine months ended September 30, 2010.

We have seen a significant impact on our margins throughout the last three to four quarters due to repricing during our largest contract renewals. As we look forward, it's important to note the very high level of visibility and stability of our contract portfolio. We now have visibility on approximately 80% of our revenue through 2012, with very few significant contracts that will be coming up for renewal during the remainder of '11 and '12. The net result of this repricing are declines in credit card cash advance margins from 20.9% in the third quarter of 2010 to 17.3% for the third quarter of 2011.

In the ATM segment, the gross margin was $16.6 million for Q3 '11 as compared to $18.4 million for Q3 10. Again, we expect the large downward pressure on margins to be behind us as this new pricing is fully reflected in our current portfolio. Operating expenses, exclusive of depreciation and amortization, decreased by approximately $200,000 from third quarter of 2010, and is down approximately $5.1 million for the nine-month period ended September 30. The operating expense reduction for the third quarter, adjusted for nonrecurring charges, would've been approximately $1 million.

We ended the quarter with 383 full-time equivalent employees, compared to 413 at the end of the third quarter of 2010. Again, it is our continued attention to focus our free cash flow on debt reduction, and from January through September 30th of 2011, we have had net debt repayments of approximately $35 million. Total debt is currently at $179 million, down from $209 million when we refinanced in early 2011. Using the 12-month trailing adjusted EBITDA as of September 30, our leverage ratio was approximately 2.94 times. As we stated previously, our cash EPS for the third quarter of 2011, which includes non-cash taxes and stock comp, was $0.08 per share. If adjusted this total by approximately by $0.01 a share for the $800,000 nonrecurring cost discussed earlier, cash EPS would've been approximately $0.09.

Our GAAP EPS was $0.03 per share for the third quarter, and adjusted $0.04. For the nine months ended September 30, cash EPS adjusted for equity comp charges and tax provision was $0.22, and cash EPS adjusted for nonrecurring charges was $0.28. As of September 30, our cash was approximately $38.3 million. Looking to the guidance for the remainder of the year, we need to take a few minutes to revisit the impact of Durbin on our net debit interchange cost. We previously estimated that in the fourth quarter of 2011, the Durbin Amendment impact could be approximately 100 basis points of improvement to our full year 2011 total gross profit margin, and 400 basis points of improvement for 2012.

It is our belief, based on October's results, that these are both still reasonable estimates for the impact of Durbin alone. However, as you begin to model 2012, we believe the combined effects of Durbin, the acquisition of the MCA portfolio, uncertainties in other network fee changes, and our own utilization of these savings in our current contract portfolio, we believe this will lower to around 350 basis points for 2012. First, I'll discuss the impact of the MCA acquisition. The MCA acquisition will add approximately $50 million to revenue, at significantly lower margins than our current portfolio.

Second, the impact of the various uncertainties in other card fees. I'd like to remind everyone that although we have clarity on the Durbin legislation, and have confirmed the savings in our October debit billing, there is still uncertainty regarding additional fees and surcharges that the networks and associations may implement, which may offset a portion of these benefits in the future. As an example, although not directly related to the debit interchange reduction, Visa has recently announced changes in their interchange reimbursement structure for Visa and Plus ATM transactions that will become effective in April of 2012.

This change will materially reduce the net reimbursement that GCA receives from ATM transactions processed by Visa. We fully anticipate other networks will take similar changes. Although we believe that we will be able to pass through most of these costs to our customers, it will potentially have a negative impact on our business. This change is indicative of a very fluid dynamic in the financial services and payments industry, as banks, associations and others try to adjusted to the post-Durbin world. The third impact is the GCA utilization. The margin range provided also assumes that we may utilize some of these savings strategically in our contract negotiations during 2012.

As a reminder, this calculation is already net of a significant contractual benefit that will accrue to our customers immediately. However, we anticipate using a portion of the additional savings to strengthen our portfolio and drive our other product initiatives. Although we tried to be conservative in our estimates, we believe it is very important for you all to clearly understand the uncertainties surrounding these potential fees and how they could affect our projections and guidance. Due to the potential material impact of this, we want everyone clear, and refer you to a detailed discussion of these risk items in Item 1A of our Form 10-Q for the period ended September 30, 2011.

Let's now discuss our current forecast for the remainder of 2011. If we include the fourth quarter impact from the debit interchange reduction, we believe the Company's estimates for both cash EPS and EBITDA will end the year within our current guidance ranges. We are maintaining our full year cash EPS guidance of between $0.38 and $0.43, and EBITDA guidance between $58 million and $65 million. As a reminder, these both include the impacts from the debit interchange reductions, as well as adjustments for one-time charges of approximate $4.2 million, most of which were associated with the refinance and the impact of our final purchase price allocation on Western Money.

Our capital expenditures for the remainder of the year will be between $5 million and $6 million. However, we believe we're probably closer to the low end of that range. We expect fully diluted shares outstanding for the year to be between 64 million and 65 million shares, and we anticipate continued use of our free cash flow for debt repayment throughout the rest of the year. Now, I'd like to spend just a minute to discuss the MCA acquisition. Scott already discussed some of the specifics surrounding the purchase agreement, so now let's discuss the metric to help you with your modeling. MCA annual revenues are approximately $50 million.

Due to the nature of the acquisition, which is principally customer contracts and other intangibles, the relatively quick amortization of these items will be dilutive to our cash EPS by approximately $0.015 on an annual basis. However, the acquisition will have a positive EBITDA contribution going forward. In summary, we believe the financial results showing stabilization, combined with the effects of Durbin and the MCA acquisition, position us extremely well for growth in 2012 and beyond, and now I'll turn the call back to Scott.

Thanks, Mary Beth. As we wrap up this quarter's update, we are now seeing the kind of stability and modest growth in the underlying segment we had all hoped for. Against this backdrop, we have great visibility into our portfolio, and the positive impact that Durbin will have on our results over the near-term. We remain very optimistic about the future. We received very positive customer response to our new products and kiosks at the G2E trade show this year. We were able to fully demonstrate our new multi-function family of Western Money kiosks, and this has been received very well and is the driving factor behind a 30% plus increase in unit sales of Western Money is experiencing this year.

We believe this trend will continue next year as functionality differential and aging installations push replenishment cycles. These machines were installed in the opening of both Rivers Casino in Illinois, as well as Resorts World New York Casino that just recently open. It's great to see these properties see terrific success on their openings. While still early, both look like they will easily be Top 20 accounts for GCA. The River Casino results provide some insight into how important these new openings can be for GCA. While their opening has caused some fairly large share shifts in the Chicagoland market, it is most important to GCA on what it's impact is on the entire market. Total gaming revenue has grown 12% to 14% in this market.

Resorts World New York promises to have the same impact on their market, and we continue to believe that our products and business intelligence tools give us advantage in bidding for new casino openings, and we note that there is a fairly constant stream of new openings over the next few years that we hope to be a part of. We believe that continued segment trends, new openings, expanded gaming markets, and folding in the MCA portfolio will provide core growth moving forward, and the Durbin impact will provide further leverage on the bottom line.

On the product front we continue to see growth in this year's initiatives. The CSI business continues to grow, as well as several other marketing and alliances initiatives. We have a growing pipeline of new products, including expanding our kiosk lineup, moving ahead on cashless gaming products, getting QuikTicket into the market, and several other promising emerging ideas. All these products, new to GCA this year and next, all are value-added and will be accretive to our margins. We are continuing to invest in technology, and believe we have transformed our Company more towards a gaming technology company, focused on payments and cash management for casinos. We have essentially completed our network upgrade project, and continue to deliver best-in-class service levels.

We are increasing our development in IP capability, and the pipeline of new products should ensure we have a healthy stream of initiatives, year-over-year. So, in summary, Q3 results were as expected. Not as good in the absolute as we would like but in line with the first half run rates. No surprise there. However, looking forward you can now, with reasonable certainty, see the opportunities in the next year. We'll remain focused on growing EBITDA and cash to allow us to strengthen our balance sheet and to add value to our shareholders, while continuing to invest in the organization and in our product development. By continuing to focus on execution in 2012 we position ourselves well for the future, whatever new opportunities present themselves. I think I speak for the entire organization when I say we're all looking forward to this positive momentum going into 2012. So, with that, operator, we will open it up the call for any questions.

Thank you, sir. (Operator Instructions) Our first question comes from the line of David Bain with Sterne, Agee. Please go ahead.

Great, thanks. I guess first, guys, on MCA acquisition, could we get any color on the process of taking back that customer base, namely Caesar's, some of those properties? I assume they sign off on the transfer, and a question if they will be using your tech, like the 3-in-1, or continue to use the MCA tech?

We are obviously expecting to close this so we can have some more details in the next call. At this point in time, we're focused on getting them transitioned over with a minimal amount of changes. We'll let that relationship grow and let our technology and products and services drive the decision that the customers make.

Okay, and so Caesar's, they need to sign off, it sounds like that process is going well?

Yes. We don't see any issues to closing right now. It should be relatively mechanical.

Okay, and then Durbin. You mentioned your anticipation that some of the cost savings may be absorbed by renewals. Is the outlook that the new tech that you discussed earlier would take over some of the margin enhancements, should that happen? I guess what I'm looking at is, if we look at 2013 versus 2012, understanding the accretion in '12, would you expect margins to be higher? I know if early to talk about '13, but just looking at it from the margin perspective.

Yes, it is. I think it's reasonable. I'll let Mary Beth give you her comments too, but I think from a strategic standpoint, what we see, is we see a tremendous amount of opportunity going into 2012, both in terms of not just the renewals, but also our ability to push ahead on new products and services, and so we just wanted to make sure that as we laid out the information that we gave you today, that we give ourselves some opportunity to be as aggressive as we need to be to strengthen our Company in 2012. So there's nothing set or anything I can tell you in terms of exactly where we think that reinvestment's going to be, but we certainly have the opportunity to do that. We'll continue to look at ways to do that, both with technologies as well as driving new products to the marketplace to improve the uptake of those new products, as well as to ensure that we get the renewals that we want.

Okay and last one, I can't let you go without this. QuikTicket. I know that it's still in process. If we can get any kind of update, and is the implementation schedule after everything's signed off on by Visa, or the powers that be, is that refined with a set initial rollout site, and then how long can we expect testing to be before maybe a larger rollout?

Yes. We continue to share, I think, everyone's frustration in terms of the length of time it's taken to get all the approvals and so forth, and we're prepared to move very quickly once we get those to get out into the marketplace, and we would expect to have a reasonably quick trial period, whether that's three months or four months or two months. I think we'll wait to see how that rolls out, but we're prepared to move very quickly once we get the final approval from the Card Association.

Okay, and the site has been chosen, I assume, right?

We have a pretty good idea of the place or places we would want to go, yes.

Okay, great. Thanks, guys.

Thank you. (Operator Instructions) And our next question comes from the line of Matthew Kempler with Sidoti and Company. Please go ahead.

Hey, thank you. So, first of all, to follow-up on QuikTicket. In terms of the approval process, is there a back and forth at this point, or, are you waiting on hearing something?

The back and forth has been we've answered all the questions, we've gone through all the traps. They're writing the rules and we're waiting for that to work through their system.

Okay. All right, and then, regarding the MCA acquisition. I guess the primary question is why did MCA approach you? What led them to decide to seek somebody to acquire them?

Well, I would have to speculate on that. I'll just tell you that we know that it's a tough market to compete in when your portfolios are priced the way they are, and there's increasing pressures on technology, increasing pressures on licensure, and so forth. So I think it's, like I said, I think it certainly supports our thesis on what we think the sustainability of some of the pricing that's out there in the marketplace is on some of our competitors.

Okay, and then switching over to Durbin, can you share with us how the initial conversations are going with your customers? Now that the Durbin benefit is out there, how quickly you are moving with customers, even customers that may be reviewing months out to locking contracts? Just some initial thoughts on how the whole process is working.

Well I think it's pretty straightforward. These are big changes that happened. We've just been through October, we'll be moving through the parts that contractually we share with them. We'll be moving through that in the next 30 to 45 days, and beyond that, it is what it is. I think the thing I would remind everybody of is it doesn't change the commissions or the basic economics of our customers in GCA. GCA is actually the merchant as well as the acquirer and the processor here for these transactions. So as the merchant, it has the most impact on us because it changes our underlying cost structure. In fact, it will be a slight positive to the customers where, because of the way we split up our commissions and so forth, they'll see a benefit in there, but it really is fundamentally a change in the cost structure that GCA has as the merchant. So, and like I say, it gives us a great opportunity. It gives us a great opportunity to sort of jumpstart and leverage some of our bottom line as we look forward, and we'll look for opportunities if it makes sense to invest a little of that to improve our business moving forward, bit we don't expect it to be anything more than that.

Okay, and then lastly on WMS, how much of the strength that we're seeing is the new installations that you've been talking about versus a replacement cycle, and then how sustainable do you think this kind of trend is, or do you expected to be lumpy on a quarter-by-quarter basis?

Well, equipment is always very lumpy on a quarter-by-quarter basis, particularly with the size of some of the installations and so forth, and so certainly quarter-to-quarter, it would be extremely hard to predict, but we're very encouraged by the uptake. I would tell you it is a combination of both the new openings. Obviously we had the full suite of our products, the kiosks in both the Rivers and Resorts World openings. We see other openings coming on the horizon. There's probably going to be at least 3 of the 4 that open next year in Ohio, and there are some others. So hopefully that will be one of the places where we are able to leverage growth in the equipment business. We're also seeing some growth international, and we're seen some growth in replacement cycle within our customer base. So right now a combination of all of those is what's really driving the business.

Okay. Thank you.

Our next question comes from the line of Michael Chapman with Private Capital Management. Go ahead.

Thanks for taking my call. Quick question on revenue, the 3.9% that you had, organic, is that just mainly volume, or is any of that positive mix with credit card coming back?

It's mostly volume. Credit card's kind of flat. So that number you're looking at there is a year-over-year, and in this quarter what we are actually seeing is an uptick in some of the volume metrics, which is nice.

Okay, and so you would expect next quarter, or this quarter, once you anniversary the loss last year, that should be the driver of the top line revenue, just kind of volume growth?

Yes, but the [infuriating] thing is that we are going to we had to do [Xterra] last year. We're going to have to do plus MCA next year.

Right.

So just when I thought I'd get to do the quarter-over-quarter simple.

It's never easy, Mary Beth. Never easy.

It really isn't. It really isn't. So they go and they come.

And then on the margins, the guidance for the plus 350 that you're talking about. Going forward, are you guys thinking more along the lines of keeping, ponce you realize those margins next year, keeping those margins kind of flat going forward by driving more volume and more uptake of new product in that margin range, or do you think that those margins from that level would go up or down? I guess I'm trying to figure out whether you want to drive more share and more penetration of new products and give margins to get that penetration, or whether you're going to manage to margin? So are you going to manage to margin or to growth?

Well, I think that's a great question. I think that probably if I were going to talk about it strategically, the way that the company is focused, is a lot of business growth on items that are significantly helpful to the margin line, because the size of the other products are so large, driving margin movement there is very difficult, just sheer size, but we certainly think we have a tremendous opportunity to, I would say, the focus for '12 would be cross-sell. We've got a lot, a lot, a lot of businesses that we don't have all of our products in, and some of our products that we don't have in are, by far, the more margin healthy ones. So I would say that's one of the mixes. Two, any recovery, because of the mix shift that took us down, any recovery on the way up in credit and debit, which certainly drops a lot more, will help the overall margin of the Company. So, you've got a couple of dynamics as you model forward to sort of keep in mind.

Right, and so that 350, does that really take into account any positive mix shift, or is that kind of keeping the mix as it is?

That 350's sort of a Durbin estimate with limited other impact, and the only reason that we adjusted it is because when you drop $55 million, or $50 million to the top line, with the lower margin, the cash is identical. It sucks the percentage down. So other than that, it's really, on the edges it's mostly Durbin.

Okay, and so if there was a big uptick in volumes and big uptick in credit card, then those margins could go up?

Yes.

Yes. Realize we're in third quarter here, too. So it'll really be in the next call, we'll obviously give our better look at what we think 2012 is going to be when we have all that information. We'll have another quarter to look at, also.

Okay, and then just one final question on capital allocation, given that you're going to have more cash flow next year then I think you expected 6 months ago, given the Durbin agreement. Is there any change in your use of capital in the future? I know you wanted to get debt down, but it looks like you might get to your targeted debt level sooner than you thought. So any thoughts on share buybacks?

Well, I think all of the things that you just said are accurate. We will be on our target sometime in '12, and we're actively discussing the opportunities once we get there, but I think, regardless, we'll be in a great position to do a number of things.

Okay, great. Thanks. Keep up the good work, guys.

Thank you. There are no further questions in queue. At this time I'd like to turn the call back over to management for closing remarks.

All right. Well, thanks everyone for the time today on the call, and we look forward to talking with you guys in another quarter. Thanks, and have a good day.

Ladies and gentlemen, that does conclude our conference for today. Like to thank you for your participation and you may now disconnect.