Fair Isaac Corp (FICO) 2009 Q2 法說會逐字稿

Good afternoon.

I will be your conference operator today.

I would like to welcome everyone to the FICO 2nd quarter earnings conference call.

(Operator Instructions).

Thank you.

Mr.

Emerick, you may begin the conference.

Thank you Britney, and good afternoon, everyone.

This is John Emerick of FICO.

Let me thank you for joining us to review results from FICO's second quarter of fiscal 2009, ended March 31st.

Joining me today are our CEO, Mark Greene, CFO, Tom Bradley and retiring CFO, Chuck Osborne.

A replay of this call will be available on our website through May 22nd.

The forward-looking statements made on this call, and in today's news release should be viewed with caution.

These statements represent the guidance and outlook, and are subject to risks and uncertainties, which could cause actual results to differ materially.

This includes statements considering our business strategies and re-engineering plan, and the actual expense, revenue and net income impact associated therewith.

We assume no obligation to update such forward-looking statements.

Our product road maps and similar marketing materials should also be considered forward-looking and subject to change.

Further information concerning factors and risks that could cause actual results to differ from today's forward-looking statements can be found in our annual report on Form 10-K for the year-ended September 30, 2008, and our quarterly report on Form 10-Q for the period ended December 31, 2008, both filed with the Securities and Exchange Commission.

Please refer to the forward-looking statements and the risk factors portions of those reports which are available on SEC.gov and FICO.com.

We will use certain non-GAAP financial measures on this call, including free cash flow and operating expenses, excluding restructuring charges.

A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, entitled Regulation G disclosure is now available on the Investor page of our website, under the Presentations tab.

Now I will turn the call over to Mark Greene.

Thanks, John, and good afternoon.

We will proceed today in three parts.

First, I will summarize the quarterly results and assess our business in light of current market conditions.

Second, we will get further financial details from Tom Bradley, our incoming CFO who joined the Company on April 8th.

Third, I'll discuss our strategy and business outlook for the balance of the fiscal year.

Tom and I will then be joined by retiring CFO, Chuck Osborne for a Q&A session.

Back to the numbers.

Revenue in second quarter fiscal 2009 was $159.3 million, down slightly from the prior quarter and substantially from the prior year.

Earnings per share from continuing operations were $0.37, up over both the prior quarter and prior year.

These results reflect a continuation of two trends that we discussed on the last earnings call.

First market conditions remain very challenging as they have shrunk their technology budgets, or at least paused spending in the face of the global recession.

Second, given this difficult revenue environment, we continue to aggressively manage expenses, and have again been able to generate healthy earnings.

Let me elaborate on these points, by discussing the performance of the four segments of our decision management portfolio.

Namely, analytics which are scores used to assess the risk of various transactions or entities.

Applications, which used these analytics to help businesses make smarter decisions, throughout a customer life cycle.

Software tools such as rules engines on which the applications are based.

And finally services segment, consisting of consulting and system integration work around our product.

Starting with analytics, our analytic revenue fell by $3 million, or 9% from the prior quarter.

This decline is generally consistent with the seasonality that we have experienced in prior years.

Within this result, are some puts and takes.

And on the positive side, mortgage volumes are up strongly due to refinance activity, and may continue to show good recovery if interest rates remain attractive.

On the negative side, scores used from managing credit card portfolios, which is the largest slice of our scoring revenue remain depressed as banks trim their existing card holder base, and focus on cross-selling, and instead of new account origination.

We have also seen large declines in auto lending volumes, which now appear to be bottoming out.

Overall, we view this analytics segment as good proxy for the health of the US economy.

Our scoring revenue is a co-incident indicator of the business cycle.

It got thick in the middle of last year when the economy turned down, and we expect it to recover as general economy does.

Next in applications, revenue fell by $1 million or 1% from the prior quarter.

As you noted last quarter, recession is causing clients to conserve cash, restricting investments and large technology project, and subjecting business cases to greater scrutiny.

But these same forces also lead clients to a greater appreciation of our decision management approach, since it provides a way for them to manage risk systematically across the product lines.

As a result, we see a growing number of RFPs for applications to originate and manage customer accounts, improve collections and prevent fraud.

We are particularly excited by the strength and quality of the pipeline that is developing for our latest decision management product which is our Falcon Fraud Manager version 6, that ships next week.

We are tracking opportunities worth over $100 million in both new and upgrade business for this Falcon version 6 product.

We are excited about these prospects, but we remain cautious about the speed of which we will be able to win this business, given our client's budget challenges and the lengthy sales cycle.

Turning now to tools.

Tools revenue decline by $3 million or or 23%.

We believe this reflects the lumpiness of that license-based business.

We look for the tools business to return to normal levels in the quarters ahead, helped by the fact that our Blaze and Express products remain respectively, the leading rules management and optimization products, both in market share and functionality.

Finally, services revenue grew by $3 million or 11% sequentially, partially thanks to a one-time adjustment related to recognition of previously deferred revenue.

Our clients continue to value the expertise of FICO's consultants, but they also seek to minimize their own costs by slowing down previously contracted work.

We also note several clients moving work inhouse, reflecting an industry trend of outside labor during this down cycle.

For further financials details, let me introduce FICO's new Chief Financial Officer, Tom Bradley.

Tom, we are delighted you are on board, and we welcome you.

And over to you.

Thanks, Mark.

I wanted to start with telling you how thrilled I am to join you and your team here at FICO.

Coming from a career in finances services industry, and looking at the products and services we have here at FICO.

I am really excited about how we can provide the risk management risk selection, and other decision management solutions to our customers in financial services.

And particularly, how important these capabilities are as they fix their balance sheet, and move forward out of this challenging market.

Second, I would like to thank Chuck Osborne, he leaves behind for me a very talented finance team led by Mike Pong and John Emerick, that will make my life easier, and I also inherit a nice clean set of financial statements.

So kudos to you, Chuck and good luck in your retirement.

And finally, for everybody on the line, I would like to say if you are interested enough in tuning into this call, I am interested in meeting you, and I look forward to doing so in the upcoming months.

Now lets go to the results.

As Mark mentioned, revenue in the quarter was $159.3 million, a slight decrease from last quarter.

Our revenue has moved at a pace consistent with the decline in consumer lending activity, and the consolidation of credit card portfolios and the lower level of IT spending in our four focus industries, banking, insurance, retail, and healthcare.

Recurring revenue for quarter represented 76% of total revenues, and increase from the 71% for the same period last year, and consistent with last quarter.

This high percentage of recurring revenue is a testament to the strength of our Falcon and Triad brands, whose revenues has remained steady in the difficult environment.

Consulting and implementation revenues were up -- were 19% of total revenues this quarter, versus 20% in the same period last year.

Finally, one time, our license revenues, or 4% of total revenue, a decrease from the 9% reported last year.

This quarter, 32% of our total revenue came from outside the United States, compared to 35% a year ago.

The continued strengthening of the US dollar drove reported revenue down by $7 million, on the constant exchange rate basis from a year ago.

Bookings of $47 million created $11 million of current period revenue, a 23% yield.

This is about half the amount of the bookings from the same period last year, and 10% decline from last quarter.

We experienced reduced levels of bookings, as financial institutions continue to evaluate when to start or restart investments in new products.

Moving to expenses, we have worked diligently over the past year to reduce costs.

Total operating expenses in the quarter were $129 million.

A decrease of 22% against the year ago period, as well as a 10% decrease from last quarter's expense level.

This quarter we booked a small pretax restructuring charge of $187,000.

This compares to the $6 million charge in the same period a year ago, and $8 million that we charged in the last quarter.

Excluding these restructuring charges, operating expenses declined by 19%, from the prior year and 5% from last quarter.

These savings cut across all expense categories, but we are intentionally maintaining investment in research and development at about 12% of revenue.

Now, looking at the bottom line, our ability to deliver consistent earnings reflects the resilience of our business model.

Income from continuing operations in the quarter was $18 million, a 50% increase from last quarter, and a 2% increase from same quarter last year.

These amounts include the after tax impact of the previously discussed restructuring charges.

This results in earnings per share of continuing operations for $0.37 for the quarter compared to $0.36 last year, and $0.25 last quarter.

This quarter also includes a $400,000 or $0.01 loss on the discontinued operations line.

The resulting total earnings per share is $0.36 this quarter, compared to $0.28 last year, and $0.25 last quarter.

The effective tax rate for the quarter is about 27%, driven by a higher amount of taxable income and areas outside the US, with lower effective tax rates, and the reinstatement of the R&D tax credit in October of '08.

We think these results are evidence of the significant efforts we have undertaken to deliver the highest possible profitability in this environment, without impairing our revenue generating activity.

Four more, our financial discipline, and related re-engineering efforts will position us extremely well when scoring volumes and other revenues rebound.

I would like to next talk about cash flow and the balance sheet.

We define free cash flow, as cash flow from operations, less capital expenditures and dividends paid.

The free cash flow was $46 million or 29% of revenue, compared to [$15] million or 8% of revenue in the same period last year.

This is our strongest quarterly free cash flow performance in two years.

Furthermore, our fiscal year-to-date free cash flow is $76 million or 24% of revenue compared with $55 million, or 14% of revenue from the prior year six month period.

This improvement is driven by our previously discussed expense reductions, and from effectively managing our accounts receivable.

Even in this challenging business environment we have reduced our days sales outstanding from 73 days, as of our fiscal year end to 59 days at the end of the quarter.

We are continuing to keep this cash on the balance sheet.

This approach reduces our net debt, and provides us with maximum financial flexibility in an uncertain economy.

This lead to a few points highlighting the strength of our liquidity position.

We now have $331 million in cash and marketable securities on the balance sheet.

Plus, $235 million available against the revolving credit facility this gives us $566 million in total liquidity.

Our debt remains unchanged from last quarter consisting of a $295 million balance on the revolver and $275 million in outstanding notes.

The ratio of our total net debt to EBITDA is now 1.6 times.

And well below the covenant level of three times.

Importantly, we do not have any maturities of this debt until the middle of 2011.

Finally, we did not repurchase any shares in the open market this past quarter.

Our fully diluted share count is essentially unchanged at 48.8 million shares.

We remain committed to returning capital shareholders through stock repurchases over the long term, and have $148 million remaining under our existing share repurchase authorization.

With that, I turn the call back over to Mark.

Thanks, John.

In this concluding section, I would like to update you about the health of our business and our prospects going forward.

Let me begin with three corporate updates.

First, concerning the management team.

We are delighted to have two talented leaders to join our executive ranks recently.

In addition to Tom Bradley who joined us this month as CFO, from Zurich Financial, we are very pleased that Deborah Kerr came on board in January from HP, as our Chief Product and Technology Officer.

With these two senior appointments, I feel very good about our executive team.

We have the talent and discipline to weather this difficult period, while also positioning our Company for growth.

Second, concerning our corporate identity, we have unified the Company around the FICO brand, as the name that best resonates in the marketplace.

Legally, we are still Fair Isaac Corporation.

but we are doing business as FICO.

It's a strong brand, and one that we will be careful to be good stewards of.

You will see the FICO brand used increasingly in product names and marketing collateral, thought leaders of articles, et cetera.

And thirdly, concerning innovation, I am pleased that our efforts to harness the creativity of our 300 analytic scientists and researchers are starting to pay off.

We are now delivering important innovations to the market.

In analytics, we have rolled out scoring timely innovations, including a new FICO score tailored to the mortgage industry, a score trend service that lets banks track credit quality over time.

And just last week, a mortgage recovery initiative when we call the FICO MRI, mortgage recovery initiative that lets both lenders and homeowners participate in loan workout activity to prevent foreclosure.

The MRI solution uses our analytics to screen applicants under the new Federal Mortgage Relief programs, and to flag homeowners at risk of future defaults.

Each of these innovations is designed to bring our expertise to bear on a topical issue on the national agenda.

We are now similarly focused on innovations for the credit card industry, where the next wave of delinquencies is forming.

In applications, we are shipping now the first generation of the new decision management products that have been years in the making.

Our collections product known as Debt Manager 7 began shipping in December.

Our fraud products for banks, Falcon 6 ships this month.

And the version for insurers, Insurers Fraud Manager ships in July.

These applications are important building blocks in our vision of connected decisions, helping financial firms to serve their clients and manage risks holistically, both across multiple financial instruments, and over the lifetime of their consumer relationships.

Finally, in tools, we are delivering innovative products that make it easier for clients to manage through turbulent times.

We are now shipping a new Decision graphing tool, with our Triad and Blaze products, that helps financial managers to visualize and update their business rules in real time, which is very useful in dynamic applications such as credit line management.

Later this quarter, we will ship the next version of our optimization product that is 40% faster in helping financial institutions to optimally price products, and determine ways to maximize consumer profitability.

So I feel good about our ability to integrate in ways that produce relevant commercial offerings, which is why we continue to invest significantly in R&D, even as we trim spending in other corporate overhead functions.

So where does this leave us in the months ahead?

Namely the second half of our fiscal 2009 which ends in September.

Let me comment on the prospects in each business area.

Starting with analytics, our analytics revenue is largely driven by our scoring business which remains hard to predict.

Our bureau partners report some resilience in scoring volumes in March, especially in the mortgage space, but we remain concerned about the deterioration in credit card space which cuts both ways for us.

Banks are shutting or consolidating accounts which hurts our transactional revenue, but they are also looking for more help in credit line management and related analytics, which helps.

Overall, we see early signs that the decline in scoring volume is abating, but it is too early to call the bottom.

We do remain cautiously optimistic about our scoring revenues once the economy recovers.

Turning to applications.

Application revenue seems flat until financial firms resume their technology spending.

We are heartened by the strong and growing pipeline for new Decision management products, particularly the fraud products that I have mentioned, and many of these opportunities will take time to progress.

The tools revenue finally is expected to recover to normal levels in the months ahead as firms pursue do it yourself technology products.

The net here is a revenue picture that seems to be largely moving sideways, or remains both murky and volatile.

We continue to consult closely with the clients about their own financial outlooks, in hopes of establishing improved visibility that will allow us to provide revenue guidance.

In the interim, we believe it is appropriate to provide guidance on the thing we can control, expenses as we remain focused on delivering solid earnings.

We previously guided that we were expecting operating expenses to decline from $612 million from last fiscal year, to $535 million in this fiscal '09, excluding restructuring charges.

Our ongoing cost re-engineering work now suggests slightly better performance in that.

So we are updating the full year OpEx guidance to $525 million.

We are providing this update to emphasize our ongoing commitment to producing strong cash flow and delivering solid earnings.

Let me conclude with a personal perspective on the Company.

FICO's mission is to be the leader in decision management, transforming business by making every decision count.

We have pioneered the use of predictive analytics to help companies make smarter decisions and materially improve their business outcomes.

That value proposition has never been more relevant than today.

Our clients understand the power of our analytics, our applications and our tools.

Over 500 of those clients gathered last month in New York, for our interact user conference.

They attended seminars for credit line user management, best practices and mortgage collections, and optimal lending strategies under the TARP system, and told us repeatedly how relevant FICO is to their business.

While many of the clients have trimmed their technology spending in this rough economy, they also tell us they understand and need our connected decisions capability, and that they intend to buy from FICO as their financial health allows.

So while the near term will likely remain challenging, I am more optimistic than ever about the eventual payoff from our decision management strategy.

Now before we moved to the question period, I would like to thank our outgoing Chuck Osborne, our CFO, for his five years of leadership and management contributions at FICO.

As previously announced, Chuck is preparing to retire this summer, and he is now working closely with Tom and smooth transition of our finance function.

So I want to express my thanks to Chuck for his service to the Company and invite him to say a few parting words.

Chuck?

Thank you, Mark, for your kind comments.

This is my last earnings call for FICO, and I am going to miss the discussions and repartee with our colleagues in the financial sector.

I feel very good about what we have been able to accomplish in financing and protection of earnings for FICO over the last five years.

We certainly have our challenges today, especially in light of the difficult economic conditions for our financial institution customers.

But those conditions have not dampened my enthusiasm and optimism for what FICO brings to the marketplace.

I am reminded of a statement by one of our largest shareholders.

He shared with me one of the reasons he loved his investment in FICO, was this opportunity to bring value to the market through the ingenious use of mathematics and analytics, literally making something out of nothing, were the words he used to describe what our mathematicians and analysts, and developers do to create value for our customers.

That opportunity exists even more today, than it did when the shareholder said those words.

I am very thankful to my colleagues in FICO, especially Mike Pong and John Emerick who have both been instrumental in helping build the finance function at FICO.

With the arrival of Tom Bradley and with the continued help of the finance team here, I have no doubt that the finances of FICO are in good hands.

And finally, my sincere thanks to our shareholders for their support of FICO over the past five years.

It has been and honor and pleasure to serve your corporation.

John, I will turn it back over to you.

Thanks, Chuck.

This conclude our prepared remarks, and we are now ready to take your questions.

Brittany, please open the line for questions.

(Operator Instructions).

First question comes from Carter.

Your line is open.

In looking at your scoring revenues, can you just help me reconcile the difference between what you guys are seeing and the bureau's?

Both of your public bureau friends there, have reported down low single digits scoring revenues versus you guys down 21%?

I am just trying to understand the difference there.

So we have to make sure this is a sequential or year-over-year question you are asking?

Year-over-year.

Well a couple of the bureaus I think are showing more than low single digits year-over-year.

I have seen a few of them reporting single digits on the sequential basis.

A partial answer to your question, Carter, is it has to do with mix.

We are heavily weighted to the credit card segment.

It is 70% of our revenue.

And that of course, is the challenged part of this growing business.

Some of the other bureaus you have seen reporting, do a little bit more for instance in mortgages, which has been growing.

But for us, mortgage is about 10% or 11% of the business.

But the mix is not working to our favor at the moment.

Of course that same mix may benefit us when the card business recovers, when the economy does.

Okay.

I am sorry, did you say 70%.

I thought it was 60%.

About 70% on credit cards and about 10%, 11% on mortgages, and the balance is autos and other forms of consumer credit.

So has your card exposure gotten larger?

But you guys showed a slide on the Analyst Day that it was 60%.

It is 60%.

It has been in the 60s.

It may not be up to 70, it is within a few points of 65%.

Great.

And Tom, on, can you give us the size the one time gain in your pro services?

I am sorry in which?

In your Professional Services, you had one time gain.

$3 million revenue adjustment.

Thank you.

Lastly, and I will get off here.

What are your expectations with the tax rate going forward?

We think a marginal rate of about 30% is our expectations for the rest of the year.

Okay.

Thank you very much.

Thank you, Carter.

Your next question comes from Michael, your line is open.

Hi guys.

Thanks for taking my question.

Carter actually asked a couple of good ones, that I was looking to ask.

Just, I guess one for Mark.

In -- when do you expect the scoring revenue to up tick and you guys are in a position to see a lot of data on the US consumer, and in your prepared remarks, you kind of mentioned that you didn't really quite feel ready to call the bottom yet.

Do you still feel that the US consumer is still as troubled as it was during last quarter?

Or are you seeing maybe the signs bottoming out with the US consumer.

We are seeing signs of bottoming out, but I don't know that we touched bottom yet.

The best answer I can give you is sort of what I said before Michael, which is, the more we study our scoring business, the better we understand that it would be a close indicator of exactly where the economy is.

It is a co-incident indicator, and so when you see unemployment -- actually unemployment -- so when you see other signs of economic recovery, you should expect to see our scoring business recover sort of right away.

It go sick right away when the economy did, it will recover right away.

We are not seeing that yet, but we are seeing as others have reported a slowing in the rate of deceleration.

And then on the bookings that you showed this quarter of $46.8 million, is that a comparable?

Is the 99.2 a comparable on continuing ops?

Or is there a number you can give us to make an useful comparison to the continuing operation.

I don't have a better number for you.

It is largely comparable.

There have been some suggestions in the industry, and we have seen minor signs of this ourselves, that there is change in some buying behavior where they are buying what were long engagements in smaller pieces, but I don't have any hard numbers to offer you there.

I would say these are comparable numbers.

Go ahead.

I am sorry.

Specifically it is continuing ops.

And doesn't include anything that was sold.

You guys used to give and Chuck used to provide this waterfall analysis, that was helpful, and we don't get this anymore, so of the $46.8 million, can you tell us what amount of the $46.8 million will turn into revenue this fiscal year for the next two quarters?

We turned about $10 million in the first quarter of that $46.

And about another $10 in the next quarter, the next two quarters.

$10 million over the next.

$20 million total in this fiscal year.

Okay.

And then, just the last one.

In terms of the expenses, the two highest margin businesses which are the tools and the scoring.

Those were down a little bit more than I was expecting this quarter.

And I was kind of curious, how you will continue to keep the margins and expenses down relative to those two high margin businesses showing a little bit more weakness than expected.

So, I think we need to correct the impression about margins.

You are right that scoring is our highest margin, or what we more broadly call analytics, that is scoring plus a few other things.

However, tools is not right up there with it.

Tools is a lower margin business, and somewhere between those two is applications.

And so, the margin projection is that we have here, are the assumption that our applications business holds up, and begins to grows over time.

One last one, if I may.

The -- you mentioned normal levels in that tools business.

Is analytical software tools, is normal levels approximately what you posted in maybe in Q1?

That's right, Q1.

And I think that was similar to the prior couple of quarters before that as well, and we think we saw a blip last time having something to do with transactions that are lumpy, that didn't quite fall in line in time.

So its 13 to 14.

So thats approximately normal levels?

Yes, thats the right range.

Thanks for answering my questions.

Thank you, Mike.

(Operator Instructions).

Your next question comes from Thomas.

Your line is open.

Thank you for taking my question.

One quick follow up to the previous questions.

What has happened to average contract length over the last year on the bookings?

One second.

We are looking for you.

Roughly constant.

Tom, it is John.

It is about the same as it was last quarter.

For our total booking about two years.

That is down year on year, is it?

I'm sorry, say that again?

The average contract length is down year on year.

Wasn't it down last quarter?

I will tell you in one second here.

It was, it is up from last quarter.

Just slightly over two years.

This is for our total bookings, and last quarter it was about constant where it was in the 4th quarter.

It is ticked up a little bit and hovering right about in that two year range.

One more question for you.

Different topic.

How is the myFICO.com business performing?

Is that been able to maintain healthy production?

We haven't heard you talk about that lately.

So there are two things there that you may be aware of that, two months ago, one of the partners whose scores had been available on Microdata.com, Experian, elected to withdraw from that relationship.

That had some impact, not material but measurable, low millions of dollars, $1million or $2 million per quarter on the revenue there.

Otherwise, however, we continue to enjoy good growth in consumer traffic and subscription rates.

So that is a business that previously been on a 10% revenue growth trajectory, and you will net out some of loss that we expect going forward due to the Experian withdrawal.

And we will take a pause in that growth, but the long term trend in myFICO continues to be a growth trend, as consumers find greater interest in tracking their own personal finances.

Thank you, again.

Thank you.

Your next question comes from Mike.

Your line is open.

Good afternoon, Mike Lattimor with Northland.

So -- on the -- at the Analyst Day, you mentioned kind of a breakdown between acquisition versus origination versus maintenance in the scoring business, have those percentages changed at all among the categories?

No, they have held up as they have.

Are you seeing, you mentioned the consumer monitoring their scores more.

Did you notice any sort of material increase in banks monitoring their portfolios more in the quarter?

In the few places, yes.

There are a handful of banks that are beginning, especially in the cards portfolios, to take what had been previously quarterly checks on their consumers, moving to monthly.

It is not yet a broad based trend, but there are banks that are looking more closely at especially troubled accounts and therefor pulling more scores.

I might take this opportunity to also mention something else about the myFICO business, relative to your question and the prior one.

In this mortgage initiative that I referred to that was announced last week, the Mortgage Recovery Initiative, MRI, that leverages quite deeply our myFICO website and infrastructure.

And that's a reuse the structure that we have for consumers, now applied to the mortgage space.

And we expect further traffic coming as a result of that.

Okay.

With regard to the expense forecast of $525 million.

You mentioned that your engineer and cost re-engineering efforts were a little ahead of schedule.

Is that the main main influence or is it just more caution in the environment as well?

Little of both, I think.

Okay.

You also mentioned that on scoring, you get a little bit of a seasonal weakness in your fiscal 2nd quarter.

I mean, are we in an environment where we could have normal seasonal patterns here, or seasonality is sort of not the biggest influence on the business.

It is hard to use the word normal for anything going on in the environment.

I will say the step down, the minor decline we saw in scoring is consistent, with what we have seen, if you apply seasonal factors from the past.

And I don't want that answer to be interpreted to be saying our scoring business is returning to normal.

But we saw a normal variation last quarter.

Got it.

Great.

Thanks a lot.

Okay.

Thank you.

Okay.

We are all done everyone, thank you very, very much, appreciate all your time.

And if anybody has any other questions, you know how to get in touch with us.

Thank you.

Thank you.

This concludes today's conference call.

You may now disconnect.