Gladstone Capital Corp (GLAD) 2005 Q1 法說會逐字稿

Good day ladies and gentlemen, and welcome to the Gladstone Capital quarterly shareholders conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touch-tone telephone. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's call, Mr. David Gladstone. Mr. Gladstone you may begin your call, please.

Thank you for that introduction. This is the quarterly conference call. It's actually, the first quarter. Our year end is September. So this is the first quarter ending December. Since this is a conference call, I will read the obligatory warning about forward-looking statements. This report that I am about to give may include statements that may constitute forward-looking statements within the meaning of the Security Act of 1933 and the one for 1934. These forward-looking statements inherently involve certain risks and uncertainties. Although they are based on the Company's best current plans that we believe to be reasonable as today no assurances can be given about future performance.

There are many factors that may cause the Company's actual results to be materially different from any results. Either expressed or implied, in these forward-looking statements, and these include those factors listed under the caption risk factors in the Company's 10-K filings as filed with the Security and Exchange Commission. And by the way those can be found on our website at www.gladstonecapital.com. And the Company is not obligated to publicly update or revise any forward-looking statements whether as a result of new information or future events. Well, the quarter ending December 31, 2004 was a good quarter for our Business Development Company. The loans that we put on the books, we had a nice number of new loans, many of them we told you about in the quarterly call in December. Tech Lighting, 9 million, Global Materials 5.5, Valor Telecommunications about $10 million total now. Santana Plastics, interesting company for about $8 million. Advanced Home Care 7.5. And then three smaller ones, Polar for 3, Regency Gas for 2 and Marietta for 2.

During the quarter we were repaid about $25 million, most significantly A and G for 12 million and 12 million in American Water Heater. And we did sell Burt's Bees for about $975,000 as well. After the year -- after the year end and the first quarter end, we invested in loans of about $8.5 million and were repaid about 4. I view those payoffs obviously with a lot of mixed emotions as we've discussed before. We get the money back we get some good prepayment fees and success fees, but of course those assets have to be replaced. The fees from payoffs and -- were wonderful for the first quarter. American Water Heater gave us about $1.4 million in new income for December. We have now 11 companies that have paid us off since the inception. And the average return from those loans has been about 19 percent. So our program is working. No reason to change anything. So we plan to keep going as we have in the past.

We do need to add more people and we have signed up two new associates. So we have some more people coming on board and we are still looking for good people. Si that will help us increase our capacity and grow faster. The numbers for this quarter ending December were fine. Quarter ending March looks good, too. For the quarter ending December, net investment income and this is the number that we all look at the most, net investment income is the number that we pay our distributions to shareholders from. It's the most important number that we look at. There are some adjustments to that number to get to the tax number which is technically the one that we pay from. But that is nevertheless the one that we spend the most time looking at.

So net investment income, that's before any appreciation or depreciation. That for the quarter ending December looks good. And was in the about $0.31. Then you have to add about $0.11 or $0.12 to it for the $1.4 million. So we are about forty some cents for that quarter. So it was a pretty good quarter. Wish we had done better. We have to put more loans on the books in order to get that number to rise faster. On the unrealized area, this is where you have appreciation or depreciation in the portfolio. We had a move up of about $267,000 for three months. Not much to talk about. Most notably, as we talked about last quarter, Finn Corporation now looks steady and it continues to move along at a good pace. That Company is paying as agreed.

We believe there is no reason to worry about the payments or the valuation that's been written down by Standard and Poor's. It's backed by a wonderful buyout company that we worked for I've worked with for probably 25 years. And they have a stellar record. That company has about an 80 percent market share and we feel very good about that. Another one that was written down that we talked about I think last time was Inca, that was down by about $250,000. But after the quarter ending December, that loan paid off in full. So we got all of our money back there. And this is not to say that Standard and Poor's is wrong in their valuations when they take things down or even that they are very conservative. It's just their evaluation service is looking at it from the standpoint of what we could sell the loan for if we had to sell it on a specific date, namely the date for the quarter ending.

And so they are using this market test for the loans and based on the 20,000 or so loans they follow, this is their best guess of what the loan would sell for if we had to sell it. But we didn't sell it. And it paid off in full. So in essence we got all of the value out of that and a higher amount than the value that we put on it last year. So net increase in shareholders equity for operations, that is the all inclusive number, the net investment income and the appreciation was about $0.43 a share. So that was a good quarter. And we are happy, but we were moving on to the next one.

On a front of portfolio valuations, we did talk about just a few minutes ago Finn and that has the lower value and as I mentioned, that company is doing just fine. We really don't have any big problems in the portfolio now that we got a payoff from Inca, that was the one that we were worried about the most. But that's now gone. So our portfolio has gotten stronger and stronger as we have gone forward. You will notice that the risk rating system that we use, this is the one that we came up with in concert with looking at what S&P and others are doing and came up with our own system that has qualitative measures as well as quantitative measures. That risk rating system doesn't really adjust for larger size companies that we feel we can take a little more risk for. And having done some loans or made some loans to some larger companies during the quarter that risk rating number moved from about 7.6 down to 7.2. Still well within the BB rating that we like to stay in. We wouldn't even mind going to single B if we could find enough good single B loans. Nonetheless, that moved down a little bit primarily because we put some larger loans on that had a little higher risk rating than we normally would take if it was a smaller business.

And we just feel like we can take this risk with the larger companies because they have so much more staying power. Anyway, we are quite happy with our portfolio today. As they exist. They are paying as agreed. To date we have not had a company that hasn't paid as agreed. We have no defaults. So things are working just fine. The marketplace, everyone always asks us about the marketplace and what we see in the marketplace. Since I last talked to you, the marketplace hasn't changed that much. Senior and sub debt marketplace for the larger middle market companies has continued to be very strong. Large loans -- if you're on Wall Street today and you are looking for money in the larger loan area, there is just a ton of money out there. We participate somewhat in that program, but not a lot and we turn down a lot of things that get done on the street.

These senior syndicated loans now are 200 million or more. Rates have continued to move down. They are probably 2 percent over LIBOR. LIBOR today is about 2.6 percent. So people are paying about 4.6 percent. Some of them are maybe 3 percent over LIBOR. We don't really participate this those senior loans. But there are some second lien loans that we look at and those tend to go out at 6.5 to 7.5 percent over LIBOR and we will from time to time make those loans. With LIBOR in the 2.6 range and you're adding 2 .5 to it, companies are still paying around 5, 5.1 percent for their money and that's exceedingly low. We still expect LIBOR to go up into the 5 to 6 percent range. So short-term money will continue to be cheap today, but getting more expensive and going back to normal over time. We run all of our projections as if LIBOR is going to go back to 5 percent. So we are anticipating that.

We have been very surprised by long-term rates. They have continued to come down. Looking at ten year T-bills moving down rather than up, which is still a surprise to me. But that's what the market is doing. It's somewhat disconcerting because as short-term rates go up and long-term rates come down, that tends to indicate some problems in the economy. And so we continue to be very careful. For our marketplace, though, the small loans, the smaller companies, the world is still different. We don't see pressure from syndicated loans coming into that marketplace. So anything under $100 million that needs money, it's still unlikely that the syndicated marketplace is going to get there in the next year or two. If it does, that will mean that we are so overheated that a recession is not far behind.

We are reluctant to do any fixed rate loans today. All of our loans that we are doing, the new ones, we are concentrating on variable rate loans so that we won't be hurt by the federal reserve when they increase interest rates. As you know, those of you who follow our Company, we do have a hedge in place. We bought a hedge that takes our fixed rate loans and in essence caps them so that we can't get hurt if short-term rates continue to go up. We did that sometime back and actually spent about three hundred some thousand dollars for that hedge and have written off about 214,000 of it as time has gone on. So we are not worried about rising short-term rates. We are doing things on a variable basis and we are testing each of our new loans and our existing loans against the increase in interest rates.

Our worries continue to be oil prices. They are just too high. They are rippling through the economy. They are hurting lots of businesses. We have to plan on this high oil prices right now and we look at things and make sure that we don't fall into some kind of silly understanding that oil rates are going to go down. We just assume they are going to stay the same and plan accordingly. Of course, the spending on the war in Iraq and some of the pork barrel spending that federal and state governments are doing is also putting a lot of dollars into the world system. There is just too few buyers for those all those dollars that are getting printed either printed or borrowed.

And this means that I think the dollar will continue to suffer and quite frankly it hurts a lot of businesses. It helps businesses that are exporting because the dollar has been under such pressure. But most of the small businesses that we finance don't have a lot of sales outside the United States. So we continue to worry about that even though it's not apparent what is going on there. The China trade deficit and the trade deficit with other nations is just terrible. We continue to see that those governments are subsidizing their industries so that they can put product into our country. It hurts small business as well as many of the larger businesses. So as we look at each one of these companies, we look at for the China bubble, as we call it. What's going on with the China situation and how it could hurt. And we've turned down any number of companies because we believe that Asia or the Chinese world could hurt those businesses should they enter that marketplace.

China bubble is going to break at some point in time. We've noticed that the banks in China have a huge number of loans that are in default or really are just equity investments. I think the China situation probably has more bad loans on their books today than we did when we went through our banking crisis. An interesting thing as a side line here, if the China bubble burst, I think a good short might be Wal-Mart. They have about 70 percent of their products coming from China, not including the food products. And if China has a big burst, I think Wal-Mart's a great distribution system for Chinese products but they would be hurt I think significantly by a change in the Chinese world.

Our marketplace demand for loans is just continuing to be strong. Good loans are still in high demand. We see the senior lenders still not stepping up into our marketplace. That's good for us. The banks continue to control their appetite for loans to small companies and they are not entering the second lien or subordinated marketplace at all. So we are not seeing much fallout from either the syndicated marketplace or from banks or other lending institutions similar to banks. We do see a good competition from the mezzanine lenders that are out there as well as some of the independent lenders. And I don't see any let-up in that.

Our pipeline for loan request is still very strong. Our criteria for loans remains changed. We are not changing our fundamentals. So we are sticking to our knitting as they say. If you see us changing our loan parameters in order to get better production, you probably should sell the stock. I can assure you as long as I'm here we won't be doing that. The economic strength, the industrial base that we lend to, the small and medium sized businesses just continues to get stronger. What I've noticed about the small business world is that they haven't fallen into the trap of everything is better. Let's open the floodgates. They are continuing to run their businesses very lean. They are producing good profits. We are seeing many of our portfolio companies show good profits so we feel very good about that. And I don't see any change in that over the next year.

I think the small business owners and these management teams that are running these medium sized businesses while they are hiring people and they are seeing their backlog build, they are not stepping out there and reaching for situations or deals and they are running their businesses in a very conservative manner. And that's very good to see. So they've learned from the last bubble not to get too far out there on the edge. As many of you know, last quarter we did raise -- or the end of the year just before the beginning we did raise more money. We are going to update our shelf offering. I don't want to alarm anybody. We don't have any reason to go out and raise additional equity. We raised $25 million. That was very good. We are beginning to crank up and I'm beginning to talk to folks about securitization. We've gotten Pricewaterhouse involved and that we will be talking to the lawyers soon and be drafting some documents. I'm hopeful that in 2005 we will have securitization done as a way to raise money and continue to leverage the Company up.

Please visit our website. We continue to put information about our portfolio companies up on the website. And we want you to sign up for our E-mail service. We don't send out a lot of junk. You will get just information about the Company. And so I hope you will do that. And oh, before I forget, we did have our shareholders meeting yesterday and all of the measure that were in the proxy were passed. We had about a 97 percent participation that is shareholders voted 97 percent of the vote of the shares in tabulation. Our transfer agent said it's the highest number he has seen in the last 15 years that he has been in the business. So we thank you all for voting your shares and getting that job over with.

As a summary, I do believe 2005 is going to be an excellent year for Gladstone Capital. I think we should be able to increase the dividend. No guarantee of course, but we will have a board meeting in April to declare the monthly dividends for the following quarter and hope to have some good news out for everybody then. At this point in time, I'm going to stop the conference call and open it up for questions from those of you out there who are listening. And if you will come on now and handle that, I would appreciate it.

Ladies and gentlemen, at this time, if you should have a question, please press the one key on your touch-tone telephone. If your question has been answered or you wish to move yourself from the queue, please press the pound key. Our first question comes from Vernon Plack of BB&T Capital Markets. Question, please.

Vernon, we can't hear you.

David, can you hear me now?

I can. Go to it.

Thanks very much and good morning. Few quick questions. Number one, could you tell me the number of employees that you currently have and I was hoping for a little more color in terms of your expansion plans there. Are you looking adding a lot more people? Are you looking at professionals? Just some thoughts there, please.

I think we are at 22 and we have got 2 more coming on board that will push us to 24 and we have requisitions out on the streets for 4 more people. Vernon, I would like to add 100 but I can't find the 100 that I want. We are being very picky and I don't mean that in a negative way. It's just that at this point in time we are looking for very specific talent. We can't afford to make any mistakes and quite frankly we can't afford to train any people at this point in time. So we are looking for very specific people. All of these people that we are hiring, even though they are associates of people who come out of the industry and have experience doing what we want them to do, and the other constraint that we have I hate to admit it, has been the location that we are in. We are out of space here. We are moving. We will probably move maybe not next month but certainly -- well, probably next month. We will get out of here and get into a new space. We will have room for about 60 people. I think over the next two years we will fill all of those spaces up. So we are in a mode to grow the Company pretty handsomely now that we've seen the economy turn around and we feel good about it.

Great, thank you.

Next question.

Thank you. Our next question comes from Lee Carter of Oppenheimer. Question, please.

Hi, David.

Hello, Lee, how are you?

Just lovely, thank you. I like to see your stock trade at a 6 percent return. I think that shows a strength of the Company. Pretty good.

Well it's just guessing what the dividend's going to be in the future. So it's trading on futures.

That's okay. Any of the early cash payments can stay with you as long term capital gain?

No, they are all ordinary income. We've set the Company up as mostly ordinary income. If the stock can trade at a 6 percent yield, we don't really mind raising equity should we need some. I don't think we're going to need any in the near term, but cost of capital at 6 percent yield is good for us because we are lending, I don't know what the average is now, Harry Brill's here in the office -- what's the average now?

Are you a little surprised or not -- your early payoffs coming along quicker than in past history? Or are they still about the same, David?

Oh, no, I think they are a little faster. And just to go back, we are averaging somewhere between 10 and 12 percent current pay on our loans now. So if you can raise money at 6 and lend it out at 12, even before you leverage, and after leverage, it would be off the charts. So we don't mind that. But payoffs have come quicker in the last six months. And it's due to a fairly heated marketplace in the larger loan area. And we've made some very solid lending decisions over the last couple of years and quite frankly they have grown and prospered and now they can attract institutional money and so they go to Wall Street and Wall Street will raise them 100, $200 million pretty quickly at rates that I mentioned before 2 over LIBOR.

If you are doing a securitization, if you're going to do it now, what interest rate would you give?

Well, we think we will give it about 5.5 percent. So that cost of debt would be at about 5.5 percent which is about what we are paying today. We are paying 1.5 over LIBOR.

Appreciate it. Keep the good work going. David, nice to talk with you. Thank you.

Okay, Lee. Next question?

Our next question comes from John Maier of UBS. Question, please.

Hey, David, how you doing?

I'm good John.

Can you just give us some estimates for investments going up on at quarterly basis? Is that something you would tell me?

You guys are always looking for indications of futures. I love you. I think we will clip along at about what we have been doing in the last few quarters. I don't see any big uptick in the near term, although we are seeing a lot more good companies than we've seen before. And so my guess is we will go at least at the rate that we have been going in the last few quarters and maybe even higher.

About a net of ten or so?

Oh, no. We netted about 25 last quarter. And that was some heavy payoffs. And we will probably have the same number of payoffs this quarter. It's just a very frothy marketplace when we put those larger companies -- the smaller companies aren't paying off that quick. Obviously, the old line business that we've always had of lending to smaller businesses, those go on and they stay on for years and years. It's been the larger loans that have grown up and gone into this syndicated marketplace that have paid off. So that's been the market that's been frothy right now. And we participate in it. Had a good run. And it will probably last another year or so. And then it will get so frothy that we won't go into it.

Some of the deals that we are seeing today are just -- I mean, they are 5 times EBITDA. People lending at 5 times EBITDA. And that kind of lending practice is what got a lot of the banks and institutions in trouble a few years ago. And it will come back to haunt some of them again. We watched one company come out at I think it was about 5.5 times EBITDA and it ran well for about six months and now it's trading at about 75 percent if anybody would sell you any of that loan.

Maybe my math was wrong, but we counted on the press release $37 million new investments and 25 billion redemptions.

Think it was 48. I will go back and do the math.

There was a disparity in the Q and the press release.

They left off one loan. And I read them out for you to try to cover that. Thank you for bringing it up. I should have been more -- Advanced Home Care was about $8 million that didn't get listed in there.

On the press release?

That's right. I'm sorry, Marietta was in there, too. So it was about $10 million total.

So the Q was right and the press release was wrong.

The Q is right and we didn't list all of them in the press release. We've spanked on you here for doing that.

And a couple of other quick questions. I noticed the way your average yield went up a bit around 14 percent from 12 percent last time you reported.

Just putting on a lot of small loans as opposed to syndicated loans. And they are always higher.

And just one other question with regards to there has been 132 or $8 million in taxes. Just want to address that?

Yes, that was -- what ended up -- as we -- as you run these things you get yourself in a hole sometimes. But last year, and that's year ending September 30, 2004, as we were finishing up the year, we paid out a bonus out of the subsidiary that paid taxes where we all worked. And then we had money left over. We didn't accrue the taxes on that subsidiary. So as a result we didn't put it in the financings for the year ending September 30. So we had to bring it over into this quarter. That's how it got into this quarter.

Actually, it was paid off of last year's numbers. But we had to put it in this year's number for GAAP purposes. And over time, we will be booking some expenses to that subsidiary. That's what we are working on now. And we will sop up some of that income that we have there with a loss and we should be able to recover some or all of that hundred and some thousand dollars in taxes we paid and that will be available for dividends going forward. But it's not enough -- wasn't enough money to go back and restate all of the statements for 2004. So we just booked it in this quarter.

Great. Thanks a lot, David.

Okay, John, other questions?

Ladies and gentlemen, if you should have any further questions, please press the one key on your touch-tone telephone. Our next question comes from Henry Coffey of Ferris Baker Watts.

Hi this is Henry. I actually had to pick up a phone for a minute so I hope I'm not repeating. I was just looking at your expense line. And the credit is, is that loan fees?

Not loan fees. We do a lot of work for our portfolio companies.

Right.

And before this, we had lumped everything together under managerial assistance fees. For those of you who are into thar arcane science of following business development companies you may know that business development companies must make available managerial assistance. That term managerial assistance is a very high level term, meaning you go to board meetings and you advise companies on the future progress of their business. So it's a managerial kind of advisory service. We don't charge anything for that. Either the Company never did and neither did -- neither does the Management Company today. What we have done is we've augmented the Q this year, this Q that just came out, with information about what we actually perform. And the services that the Management Company performs on behalf or not really not on behalf, but on behalf of the portfolio companies, not on behalf of the Gladstone Capital are things like structuring a loan or getting a senior lender for a portfolio company, or getting a subordinated debt or raising equity for them. These are sort of investment banking fees or structuring fees.

We will also find a CEO for a company sometimes and a head hunting fee. All of those fees come into the Management Company now. And rather than book those and keep them in the Management Company, we felt it was fair for us to rebate that, we, meaning the Management Company, to rebate that back to this public Company, Gladstone Capital, in the form of a reduction of the investment advisory fee. And so those fees that these other fees, not managerial assistance fees, but these other fees, investment banking fees, are now coming into the Management Company and we are turning around and giving a rebate back to the Company itself. I hope over time that these fees that are paid by the portfolio companies will actually zero out all of the managerial -- all of the investment advisory fee and we'll be able to run this Company off the portfolio Companies as opposed to off the shareholders. But at the end of day, I don't know that that's going to happen. But this is the beginning and this is the way that we agreed with PricewaterhouseCoopers to present it to you so that you could see the pieces and how they come together. There is an excellent footnote that delineates all of this on about page 28 of the -- it's note 13 -- I see MDNA on 28 but it's covered in two places. You can get into this and see exactly how it's going to--.

But as we analyze this information data, is this a good snapshot going forward of what your quarterly expenses will look like?

I think it's a little high. We had some extras in there. But you ought to look at one line item and that's interest expense.

Of course.

That's going to go up as time goes on. But I think it's -- you know, this thing is leveled on a 2 percent of assets. So to the extent that expenses or 2 percent of assets is going to be reduced then by all of these other fees, investment banking fees that we get. So I'm hoping the investment banking fees go up. We don't get any investment banking fees on these syndicated loans. The underwriters or the guys who put it together. The Wall Street firms get those fees. When we put together the little ones, and we bring a bank in or we bring this, that or together, we get those fees and we book them into the Management Company and then credit them over to the Capital Company.

But if we looked passed like loan servicing and management--.

Some the big funds like KKR and those private equity funds generate so much money out of those fees that there is actually no investment advisory fee for those companies which would be wonderful I think for our Company.

David, if we look at these other costs excluding the direct fees, those are also sort of indicative of where we will fall out over time?

I think so. They are a little high this quarter because we had some extra expenses in there. We had a little, you know, lawyer fees that we didn't expect. So those are a little high. I do want to warn you that one expense that's probably, I'm not sure it's representative for the first quarter, but it's going to be high is going to be the fees that we are paying our auditors for Section 404 of Sarbanes-Oxley which is all this testing that has to go on. My best guess is we are spending $150,000 just on that alone inside the Company. It is very expensive, all this testing that's going on.

Quite frankly, we think it's ludicrous. But that is the law. Pricewaterhouse has to do it. We have to do it. We have an inordinate amount of time that we spend on in-house testing and retesting things and writing it down and putting it in three-ring binders so that the auditors can come in and then test as well. So it is very painful. This -- you are reading about it. Some of the companies that are going through it now, it is exceedingly painful for those of us who are small because we don't have these huge internal audit staff that some of the larger companies do.

Have those numbers been expensed yet?

Oh, yes.

They are starting to show up?

Oh, just -- I'm sorry. I stand -- I was thinking of Gladstone Commercial. They are going through the read but they are just starting now. And so you're going to see them -- the quarter ending March. So you're going to see a hit to the bottom line.

That's what I was thinking.

Of 25, $30,000 a quarter.

It was--.

And that's just money that we could have paid out in dividends that we are doing now to assure you all that we are in compliance with all kinds of Sarbanes-Oxley.

David, doesn't sound like you like doing it but don't March on Washington.

I want to tell you, Henry, it is just a mess. I really -- we are able to handle it because we have some real pros here that are good at this kind of stuff. But I want to tell you, some of the smaller public companies are going to go through (Expletive) trying to get ready for this stuff. I wouldn't be surprised if some of the larger companies aren't going to have deficiencies as well.

Great quarter.

Thank you, Henry.

Thanks for the comments.

Other questions?

Our next question comes from Joel Houck of Wachovia. Question, please?

Joel, we can't hear you. Joel, we still can't hear you.

Can you hear me now, David?

I can, thank you. You sound like the Verizon man.

Yes, well, I guess -- I was going to short that but I guess I short Wal-Mart now on your recommendation.

I wouldn't short them today. The Chinese bubble is still quite blown up. And not blown -- not exploded yet.

I wanted to ask you about the credit capacity of the Company in the Q. Under the Deutsche Banc facility, it says you have 25 million outstanding, the capacity is 23 million. So I guess is that correct? It seems like fairly low advance rate. Second, if there is only $23 million capacity, is the next financing event of securitization and what -- do you have enough in size assets and number of assets to effect a securitization?

We are -- we have $100 million line from Deutsche Banc and KeyBank and then we have $15 million from BB&T. So we have 115 million of capacity, although the 15 million is really more like a revolving line rather than as a -- so it's really more of the $100 million that looks like we can use. So my best guess is we have got plenty of capacity for the next couple of quarters. And then we're going to have to do a securitization or raise more equity. Because we can't, we can -- I can't guarantee it, but the folks at Deutsche Banc have told us that they would go to $150 million. We have not applied for it. We will probably be talking with them in the next few months about going to 150.

But we have now I guess it's 22 to 23 different investments and we are adding a few more this quarter. So we are getting close to the point where we have enough individual loans to make the diversity test for securitization. So when we get ready, we will probably have about 30 and that's about what we think we need in order to affect a good securitization. So I think we can meet the securitization goal of doing it this year, and I think we do have capacity, if we go to the $150 million certainly, and if we have to do another small offering next September or toward the year end to get there I think we will be okay as well.

All right, thanks, Dave.

Next question?

I show no further questions at this time, sir. You may continue.

We're going to give one more chance. Okay, since we don't have any more questions, we are going to end the conference call. Thank you all for participating. Good-bye.

Thank you ladies and gentlemen, for attending today's conference. This concludes the program. You may now disconnect. Good day.