Forrester Research Inc (FORR) 2004 Q3 法說會逐字稿

Good morning, ladies and gentlemen. And welcome to the Forrester Research third quarter 2004 financial results conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (OPERATOR INSTRUCTIONS) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Ms. Kim Maxwell, Director of Investor Relations for Forrester Research. Thank you, Ms. Maxwell, you may begin.

Good morning and thank you for joining our third quarter 2004 conference call. With me today are George Colony, Chairman and Chief Executive Officer, and Warren Hadley, Chief Financial Officer. A replay of this call will be available until Wednesday, November 10, and can be accessed by dialing (877)660-6853. Please reference the confirmation ID ID120899, and the confirmation account, 2147. This call is also available via webcast and will be archived in the investor section of forrester.com until Wednesday, November 10.

Before we begin, I'd like to remind you that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expect, believe, anticipate, intends, plans, estimates, or similar expressions are intended to identify these forward-looking statements. These statements are based on the company's current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements.

These statements are based on the company's current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. Some of the important factors that could cause actual future activities and results to differ, are discussed in our reports and filings with the Securities and Exchange Commission.

The company undertakes no obligation to update publicly any forward-looking statements. Whether as a result of new information, future events or otherwise. Now, I'd like to turn the call over to Warren.

Thanks, Kim and good morning. Over the next several minutes, I'll review Forrester's third quarter results, the balance sheet at September 30th, our third quarter metrics and the outlook for our business in Q4.

Please note that the income statement numbers I'm reporting are pro forma and exclude the following items -- Amortization of intangibles, reorganization costs, and integration costs related to acquisitions, and gains and impairments on sales of marketable securities and nonmarketable investments. Also, we continue to book an effective tax rate at 35 percent for pro forma purposes. The anticipated actual effective tax rate for 2004 is 33.5 percent.

I'm pleased to report that Forrester's third quarter results met guidance we provided on our second quarter conference call. Forrester's third quarter revenue increased 5 percent to 33.9 million from 32.2 million in the third quarter last year. Net income increased 22 percent to 3.4 million, and earnings per share were up 25 percent to 15 cents, on diluted weighted average shares outstanding of 22.3 million, compared with net income of 2.8 million and earnings per share of 12 cents on 22.7 million shares outstanding in Q3 last year.

Third quarter research services revenue decreased 1 percent to 23.5 million, from 23.8 million last year. Research services revenue comprised 69 percent of total revenue for the quarter. Third quarter advisory services and other revenue increased 23 percent to 10.3 million from 8.4 million in Q3 of 2003, and comprised 31 percent of total revenue for the quarter. We expect advisory and other revenue to comprise approximately 33 to 36 percent of total revenues in Q4 and approximately 31 to 33 percent of total revenues for full-year 2004. We are holding 4 events in the fourth quarter.

On a geographic basis, 33 percent of Forrester's third quarter revenue was derived from international sales compared to 28 percent in Q3 last year. In line with our expectations. We expect international revenues to comprise 32 to 34 percent of total revenues in 2004. Operating expenses for the third quarter were 29.3 million, up from 28.7 million in Q3 last year. And operating income was 4.5 million or 13 percent of revenue compared with 3.5 million or 11 percent of revenue last year.

We are pleased that our operating margins have increased each quarter on a year-over-year basis in 2004. We are realizing some of the longer term synergies and efficiencies expected from our Giga Information acquisition 7 quarters ago.

Turning to Forrester's year-to-date results, total revenue through September 30 increased 11 percent to 100.5 million from 90.7 million in the same period last year. Net income increased 20 percent to 8.9 million, from 7.4 million last year, and earnings per share for the 9 months ended September 30th were 40 cents on diluted weighted average shares outstanding of 22.6 million, compared with 33 cents and 22.8 million shares outstanding last year.

Operating income for the 9 months ended September 30 was 11.6 million, or 11 percent of revenue, compared with operating income of 8.7 million or 10 percent of revenue for the same period last year.

Now I'd like to review the balance sheet. We continue to maintain a strong cash position. Our cash and marketable securities at September 30 were 128.4 million. We generated 13.6 million in cash from operations through September 30. And expect to generate approximately 14 to 18 million for the full year.

During the third quarter, we used 3.4 million of cash to purchase shares on the open market pursuant to our stock buyback program. To date, we have used 44.9 million to purchase a total of 2.7 million shares. Our stock buyback program authorized up to 50 million to purchase shares and we plan to continue to buy back shares on an accretive basis in the fourth quarter of 2004.

Accounts receivable at September 30 was 25.1 million, our days sales outstanding at September 30 was 79 days, up from 72 days last September 30. And accounts receivable over 90 days was 12 percent, up from 9 percent last year, and flat when compared with last quarter. The increase in AR over 90 and DSOs are primarily due to the increase in proportion of our business in southern Europe, where payments typically come in slower.

Net property and equipment decreased to 6 million at September 30 from 8.3 million in the third quarter of 2003. Our capital spending was approximately 1.1 million, bringing year-to-date capital expenditures to 2.4 million. Our capital spending plan for 2004 is 4 million.

Deferred revenue at September 30 was 60.8 million, up 18 percent over September 30 of 2003. Future accounts receivable or amounts to be billed in the future for clients with 2-year deals or scheduled payment terms was 17 million at September 30 compared with 11.3 million at September 30, 2003.

And now I'll review Forrester's third quarter metrics. Agreement value, the total value of all contracts for research and advisory services in place without regard to the amount of revenue that has already been recognized or is yet to be recognized, was 125.4 million at September 30, a 6 percent increase from last year. At September 30th, Forrester's retention rate for client companies increased to 75 percent and our dollar retention rate increased to 86 percent. Both rates are calculated on a 12-month rolling basis and both are within our target ranges.

Our enrichment rate was 113 percent for the 12-month period ended September 30th, compared with 91 percent for the 12-month period ended September 30, 2003. At the end of the third quarter, our total for client (ph) companies of his 1,832, up 15 from and up 69 from Q3, 2003.

For headcount, at the end of the third quarter, Forrester had a total staff of 568, up from 545 at the end of the second quarter. Current headcount includes a research staff of 196, up 4 from 192 at the end of Q2, and a sales staff of 187, up 16 from 171 at the end of Q2.

The last topic I'd like to cover today is our business outlook for Q4 and the full year 2004. Our pro forma guidance for Q4 and the full-year 2004 excludes the following -- Amortization of identifiable intangible assets which we expect to be approximately 1.4 million for Q3, and 6.5 million for full-year 2004; gains and impairments on sales of marketable securities and nonmarketable investments; and previously recorded reorganization charges.

For Q4, we're on (inaudible) to achieve total revenues of approximately 35 to 37 million, and operating margin of 13 to 15 percent , interest income of approximately 650,000, a pro forma income tax rate of 35 percent , and pro forma diluted earnings per share of approximately 15 to 17 cents.

For the full year 2004, we are reaffirming our previous guidance of total revenues of approximately 133 to 138 million, a pro forma operating margin of 11 to 13 percent , interest income of 2.7 million to 2.9 million, a pro forma income tax rate of 35 percent, and pro forma diluted earning per share of 52 to 57 cents.

We have provided guidance on a GAAP basis for Q4 and full-year 2004 in our press release and 8K filed earlier this morning. Thank you, I'll now turn the floor over to George.

Thanks, Warren and good morning everyone. I will review activity for the third quarter followed by an outline of our fourth quarter plans. After my remarks Warren and I will take questions.

Business during the third quarter showed continued stabilization. We saw new business click up in the quarter. We signed 16 new 1B-plus companies, including of AFLAC, Enterprise Rent-A-Car, Phillips Van Heusen, Sacks Fifth Avenue, and Stop & Shop. Clients are increasing their spend with us, as our enrichment rate has now improved to 113 percent and client renewals included A-W Systems (ph), Cardinal Health, [indiscernible], and the U.S. postal service.

Our boards business continued to ramp. The CIO Group, this is our network of technology leaders, now has 155 members. Technology Councils, these are the boards for technology titles below the CIO now have a total of 130 members. The Analyst Relations and Marketing Council added members for a total of 112.

In Q2 we launched 3 new programs for marketing executives, the CMO Group, the Database Marketing Council and the E-mail Marketing Council, and we ended Q3 with 22 Marketing Oval members. So, at the end of Q3, the total Oval membership for the 8 programs reached 425.

In Q3, we launched unique landing pages on our website for all 8 of our Oval boards, creating easy access to custom research and data benchmarks for all members. Oval's differentiation as the deep research alternative in the boards business is resonating with 1-B plus buyers and Oval is now the fastest growing business at Forrester.

Early in Q3 we introduced the Ultimate Consumer Panel, and this is newest product in our data portfolio. Ultimate is a a highly secure opting panel that electronically captures online and off-line behavior for more than 10,000 demographically balanced U.S. households.

Clients including 3 of the 4 major credit card networks are using Ultimate data to answer formerly elusive questions about their customers and competitors. 2 new clients signed on in Q3 and as expected, the sales cycle is longer for this product than for any other Forrester product. We expect Ultimate to continue to ramp at a deliberate pace in 2004, with accelerating growth in 2005.

We launched Client Choice during Q3 and this is an enhancement to WholeView2. Under Client Choice, Forrester's clients choose and direct the topics of 5 to 10 percent of our WholeView2 research. The initiative really is accomplishing 3 goal -- Number 1, it is increasing the relevancy of our research; 2, it extends our responsiveness in service quality; and 3, it differentiates Forrester as we continue to evolve to our becoming a push plus pull research company.

On the events front, we've hosted a consumer forum in New York City during Q3 with more than 600 attendees. And the event really showcased Forrester's differentiation. Attendees were non-IT business and marketing executives who are using technology to win markets and to win customers. Speakers included Peter Chernin, president of News Corp., David Neeleman, chairman and CEO of JetBlue, and Jim Donald, president of Starbucks Coffee.

I'd like now to turn to our plans for Q4. As most of you know, this is the busiest time of the year for Forrester, 40 percent of the company's contracts renew during the fourth quarter. We will host 4 forums in the quarter. 2 forums will be held overseas, the Finance Forum Europe and the Consumer Forum Europe.

The Emerging Technology Showcase will be held in Scottsdale in December, and finally the Executive Strategy Forum will be held in Boston next week, focusing on how -- on helping companies accelerate their top line growth. Outside speakers exclude Rick Wagner, chairman and CEO of GM, Kevin Rollins, CEO of Dell, and Michael Eskew, CEO of UPS.

Turning to Oval in Q4, more than 100 program members will attend Oval board meetings in Boston, running in parallel with the Executive Strategy Forum. In Q4 we will host 7 member meetings and 8 member conference calls. And the CIO group will be working on a special project in the quarter focussed around shared service IT organizations.

WholeView2 clients will be fully engaged with Forrester in the quarter. We will hold over 50 ForrTels, these are our client conference calls. We will publish over 450 research reports in WholeView2. And finally the research staff will answer 4500 client inquiries in Q4.

So to conclude, after a successful third quarter, we are in the midst of our busiest time of the year and I'd say frankly we're feeling pretty good about this. Our new offerings are getting traction, WholeView2 renewal rates continue to trend upward and contract sizes are increasing.

We will be on the road visiting with investors during the quarter, we hope to see many of you while we're out on the road. Thanks for listening to the call. Warren and I will now take questions.

Thank you. Ladies and gentlemen, at this time, we will be conducting a question-and-answer session. (OPERATOR INSTRUCTIONS) Laura Lederman, William Blair.

Yes, thank you. Can you give us a sense of how meaningful Oval is to revenues or bookings? I didn't catch that. And separately, just update on the competitive environment and what you're seeing happening there. Thank you.

Sure, Laura. The Oval bookings or revenue, rather, this year will be about 4 to 6 percent of our total revenues. And obviously, it's a fast growth product that we're looking to grow somewhere in the 10 to 20 percent range over the next 2 to 5 years. I'll let George take the question on the competitive environment.

I would say looking at Warren here, Oval will probably go over 10 percent next year, Laura. On the competitive front, as you know, there's a lot of management changes going on at Mehta Group and Gartner Group.

Truthfully, it's really a -- we're really looking -- seeing Gartner out there and we're seeing Corporate Executive Board out there in the boards business. I would say that we had really less activity and less head-to-head in the quarter with those guys. And I'm not really sure why that is, what's really going on in the marketplace. As I said before, as I said on previous calls, we're finding it really quite surprising how easy it is to get clients from Corporate Executive Board to join our boards. So that's going on.

On the Gartner front, it's the typical volume we're seeing out there. The other players, Mehta, Inc. we're seeing much less of those players in Q3. I hope that helps.

Charles Trafton, Americas Growth Capital.

Did you give out the agreement value figure? I might have missed it.

Yes, it was 125.4 million at September 30.

And seems like you're back to hiring analysts and sales reps. Would you expect the next several quarters for headcount to keep growing there? I notice you have some job offers out there on Monster and some of the job boards.

Yes, I would expect that we'll end the year somewhere close to 600. Probably in the 590 to 600 range.

Is that seasonally high or would that keep going in '01 -- in Q1?

It will keep going in Q1, we're still in the final stages of our plan and budget for 2005, so we don't have any final numbers at this point, but we would plan to keep hiring.

I think the change you see here Charles, is usually we've hired extensively in Q1 and Q2, and we're hiring more in Q4 this year to get ready for next year.

I guess lately it's been a tougher -- it's been tougher to analyze because you've had the Giga people in there.

True.

Do you think you'll have internal, I guess revenue growth will be apples-to-apples this year in Q4. And so will deferred revenue, as it compares year-over-year.

Correct, yes.

What was the revenue guidance for Q4?

It was 35 to 37 million. And deferred revenue at September 30, it was up 18 percent. Now, some of that obviously is coming from currency, probably about 3 or 4 percentage points, a little bit from the acquisition of G2 that we just did in the fourth quarter last year. But, a relatively large portion of it, probably 10 to 12 percent of that growth is organic.

That you just had in Q3.

Well, yes.

In deferred revenue.

Deferred revenue, that's right.

But, total revenue still looking flattish; is that fair?

Flattish to up to perhaps 3 or 4 percentage points.

In Q3.

In Q4.

Right, I mean in Q3 it looks still flat.

In Q3, we're up 5 percent over last year, and that, if you parcel it out between exchange rate, the G2 acquisition, and organic growth, it's probably about equal between all 3 of those. (inaudible) out to 2.3 each.

Okay, thanks.

Charles we're not giving guidance for next year but I think that we can see our way to double digit growth for next year.

Sandra Notardonato, Adams Harkness.

Just a follow-up on your comment is there, George on the double-digit growth that you just mentioned. Can you give us a sense of what gives you the confidence to talk about that at this time? What are you anticipating in terms of IT spends for next year? Anything to support your comments.

I think a couple of things going on here, Sandy. If you look at our business over long periods, we go through periods of planting and we go through periods of harvesting. We're entering -- we are in the harvesting stage right now. Which means we launched a lot of new products in '04, and those products we believe are going to grow very well next year in '05.

It's kind of the long-term cycle of the business, we're going into a growth period, we believe. You know, with Oval, with Ultimate, and the other new products we've launched. That's probably factor 1.

Factor 2, I'm looking at the CIO confidence poll we do every quarter now, and the numbers for CIO keep going up right through the year. Spending next year is expected to be at 6.4 percent increase for next year. So that gives us confidence that spending will continue to increase.

For the first time in 3 quarters, a majority of the CIOs we polled, believe the climate of their industry is either strong or very strong. We see a lot of change in the emotion out there, and of course, we have very good data on this, and this we believe also is setting the stage for us in the marketplace.

Okay.

Remember, the WholeView2 has only been delivered to clients for 8 months. Again, you're seeing it in the AV increases, the deferred revenue increases, we're getting good results from this product.

Along the lines of the WholeView comment, do you have the renewal rates for WholeView, IT View, and the traditional Forrester strategy type product?

No, we do not. We do not break out renewal rates by that segmentation.

Do you have any anecdotal information that you can share?

We do have break down here, Sandy. Of the total seats, of WholeView2, 72 percent are WholeView2. 17 percent are IT View, the traditional Giga product, and 11 percent is Business View. It's really -- as we look at this trend quarter-by-quarter, everyone's trending toward WholeView 2.

A year from now, I think that you're going to see north of 85 percent being WholeView2.

And the reason we can't have retention rates for either of those is because the IT Views and the Business View become WholeView2 Views.

The seat breakdown is perfect.

Great. Okay.

And I know this is very early in the quarter, but if you can give any anecdotal information on how renewals are going so far for the December quarter?

I mean, I said at the end of my call -- end of my remarks that we're feeling pretty good. But it's really early.

Yes.

How's this quarter, how does it map out month by month?

Month by month -- for us, it's typically 25 percent in each of the first 2 months, 50 percent in the third month. But in Q4 with December being a year-end -- fiscal year-end for a lot of companies, it tend to be about 20, 20, 60. A little more weighted toward the back end than a typical quarter for us.

But I'd say, very early on, so far so good.

And any comment on pricing? Any pricing pressure in the marketplace?

No.

Okay.

We actually don't see that. In fact, we're thinking of analyzing, and that's an interesting way to do it, but a price increase for next year.

Do you have any comment on what type of price increase you might implement?

No, we're really early into it, Sandy. Just analyzing it at this point.

And you're going to go through your typical year-end budgeting process around the December time frame, or when do you think you'll have that process done?

Yes, we've actually already begun the planning process for 2005. We're along way down that road but there's some betting to do in the fourth quarter. Because Q4 such a large part of our renewals come in, we essentially have to finish it in the first week or so of January.

Okay.

We're further down the road --

We're 75 percent down the road, the final fine-tuning happens in early January.

We began in August, actually.

What about the Council and Oval program. Have you had any members drop out of those 2 memberships?

Yes, we've had nonrenewals, Sandy, but the renewal rate on the product is,I don't know the exact number, but it's much higher than it is for WholeView2, as we expected.

Would that be something like maybe a 90 percent renewal?

We don't have it. It's still a little bit early for her that.

I can only speculate, but I will say it is a higher number.

Can you give us a sense as to why someone might not renew, what drives that?

I really don't. Kim's making signals to me. Do you have a comment, here?

No, just talking to the director of this program, Sandy, I've heard comments about potentially them leaving a firm, that counts as a nonrenewal. Certainly I wouldn't say that's all of them.

To reiterate what George is saying, I think the renewal rate is higher than what it is on WholeView2, our regular renewal rates, but I'd have to investigate what other reasons are. I know that's one of the reasons.

You know what we'll do, Sandy is on the Q4 call, we will do this for you.

Okay, great.

This renewal analysis for you.

Is there, since you're getting so close to fulfilling the authorization on the share buyback, is there the possibility that you might increase the size of it?

Yeah, there is the possibility. We talked about it at the board meeting this week, we have another board meeting scheduled for late January and we'll discuss it at that point and decide whether or not it's something we want to continue in 2005. We still have about $5.1 million to go, given our volume, that's probably about as much as we could use it up if we were going to do some in Q4.

(OPERATOR INSTRUCTIONS) Terry Lally (ph), Kramer Rosenthal.

The advisory services, seen the growth there. Can you break that down into whether it's predominantly the boards or the unlimited advisory or events? You know, the 3 components of that?

Yeah, really the two components of that is advisory services, our analysts or consultants delivering services to our clients. And events.

We only had 1 event in Q3, so the majority of that would be advisory or consulting that we did in the quarter.

Are the boards running through the research services line?

Yes, the boards are running through the research services line, that's right.

Okay. Was that primarily then -- so the growth in advisory was primarily the unlimited advisory service thing --

Primarily strong demand for consulting services within the quarter.

Okay. The boards business you talked about, a few of them getting into the hundreds level. Where's the breakeven level of membership?

On a membership basis, the breakeven level is about 75 to 100. Probably in the lower end, about 75.

So you've already crossed it with the first 3.

With the first 3 yes.

And the new ones, if you have a similar uptake, we'll see that cross the path of profitability next year. What type of incremental margins would you have here?

'd say on a direct margin basis, this business is looking really good. More specifics here, but we track the direct margins of all the product lines, and Terry, even in the growth mode, this product is showing margins as high as WholeView2.

Okay.

So I think it's going to help us in the long term.

That's great to see the leverage of the business model, I think sooner or later, maybe you get an evaluation like Corporate Executive Board also, 25 times EBITDA.

We can only dream about the Red Sox, too.

One more to go. Right?

Exactly.

On the buyback side, it doesn't seem like you're making that much of a dent in the share count despite being 44 million through the program. Why is that the case? Is there the option overhang or I'm kind of surprised we're not seeing the share count decrease by more?

Yeah, we had purchased back 2.7 million shares, and that is -- it has gone down certainly probably about a half million over the course of the last 2 years. But that's also offsetting option grants that are being exercised throughout the last 2-year period as well.

And then there's also the dilution effect of employee stock purchase plan, on a much lower volume but it's still out there.

And overhang is currently --

Overhang is currently at about 19 percent, Terry, our goal is to keep that at 20 percent or below.

We feel that's a good level for us.

We've really managed that down over the past 2.5 - 3 years, and plan to keep it there.

The last thing is probably a comment not a question but definitely the tone seems much better and the outlook seems better where you won't have that headwind anymore. And with almost 6 bucks in cash on the balance sheet, should be getting leverage of new products, I'd like to see you finish that up and buying back stock here in the 13s, it seems too cheap.

Agreed.

David Cohen, Midwood Capital.

Hey, gentleman, I'm a little new to the story, I'm trying to figure out with, as George said, the potential to achieve double-digit growth next year, what would that translate into or how much of that would translate into fourth quarter contract value? What would we -- should we sort of think about in terms of the amount that that could go up year-over-year?

Well, just to shed some light on how our AV comes in, about 40 percent of our contract value is in the fourth quarter and about 20 percent is in each of the first 3 quarters. I don't think, despite what our growth rate might be next year, I don't think we're going to see that trend change for the next couple years, if at all. So I'm not sure if that answers your question, but --

Well, I mean, should a -- I mean, there's a fairly tight relationship between your annualized revenue and your contract value. I mean, -- ETM is, say, 135 million or so, and your -- of revenue, and 125 million of contract value. If, in fact, you look forward and there's another 10, $15 million of revenue, how much of that are we going to effectively see in contract value bump up in Q4?

Of this year?

Yes.

You might see about half of that increase in this year's Q4.

Matt Weatherbee (ph) , M.A. Weatherbee & Company.

George, why -- I think I heard you say that -- or somebody say that it's been --it's very easy to Corporate Executive Board clients to your Oval programs. Why do you think that is? And what different information content are these executives receiving? Because my understanding is they're not cancelling their Corporate Executive Board subscription.

Let me revise a word here for you Matt, the word "vary. " When you launch a business, when you launch against a very big competitor like this, I mean, I think that in the last 12 months, 14 months, we've been surprised how many executives would leave them and come to us. When you launch a business, when you launch against a very big competitor like this, I mean, I think that in the last 12 months, 14 months, we've been surprised how many executives would leave them and come to us. I wouldn't say very surprised, but surprised.

The answer's really quite simple, I mentioned the term deep research. It's, of course, we ask them this question, why did you leave and come to us? It is -- it is quality of research, it is depth of research, it is knowledge of an industry.

Remember, that we've spent 20 years in technology. Corporate Executive Board, one of their 30 boards, is a board in technology. And as an example, we've had board meetings for the CIO group that have had Carly Fiorina in attendance, that have had Scott McNeily (ph) in attendance, these executives are old, old friends of ours and they -- we were able to connect them to our board members the way Corporate Executive Board never could do. I would say the answer really is depth of research, it is experience in the industry, and it is, I'd say it's also depth of the research staff.

We have research staff manning these boards who have spent 20, 30 years in the business. Is that's really it. It's depth and quality of research.

So some of these people, in fact, have given up their Corporate Executive Board subscription and sort of gone exclusively with you?

Yes. You'll rarely, if ever, find an executive has the time to spend time with 2 boards. That rarely happens.

I see.

There's probably a fourth element the here, Matt, keep in mind that Forrester's a research company. We have a very, very large database of realtime data on consumers and large companies and their spending patterns, their benchmarking. That Corporate Executive Board does not have, and we're feeding that into the Corporate Executive Board -- excuse me, into our Oval clients. And so that's probably a fourth difference here.

Thank you.

That all being said, Matt, we're a very small player in this business compared to the incumbent.

There are no further questions at this time. I will now turn the conference back over to your host to conclude.

Thank you for joining our call, and we look forward to seeing many of you on the road this quarter. Thank you.

This concludes today's conference. Thank you all for your participation.