Gladstone Capital Corp (GLAD) 2006 Q3 法說會逐字稿

Greetings ladies and gentlemen and welcome to the Gladstone Capital third quarter 2006 earnings 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, Mr. David Gladstone, Chairman of Gladstone Capital. Thank you, Mr. Gladstone, you may begin.

Thank you, Jan, and good morning to you all. This is the quarterly conference call and we thank you all for calling in. We really enjoy this time with shareholders and give you a special invitation that you're in McLean, Virginia please come by and say hello. You'll see a great team at work here. I think we're the best in the business. This is the shareholder call for capital symbol GLAD and I need to read the obligatory statement.

This report that I'm about to give may include statements that may constitute forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934 including statements with regard to the future performance of the Company. These forward looking statements inherently involve certain risks and uncertainties and even though they are based on our current plans that we believe that are reasonable. There are many factors that cause actual results to be materially different from future results that are expressed or implied by these forward-looking statements including all those factors listed under the caption risk factors in our 10-K filings as filed with the Security and Exchange Commission that can be found on their website as well as at the website of Gladstone Capital at gladstonecapital.com. Company undertakes no obligations to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Well, the quarter ending June 30, 2006 was not great quarter for our Company in terms of increasing our assets, we invested about $40 million in new loans and that was about seven companies. Our loan production was good. That was in the good range for us. But at the end of the quarter we had recorded about $44 million worth of loans that were paid off or amortized and including the amortization. At the end of the quarter, our portfolio value had a -- had a pretty good increase and I'll mention that a little bit later. And I can report today of course that the portfolio is very strong. Loan payoffs were heavy, as I mentioned, and exceeded our new production by about $4.4 million. After the close of the quarter, we made about $12 million in new loans and were repaid about 7.5 million. So repayments continue to come along and we're battling the repayments with new loans and hopefully the quarter -- next quarter will be better.

At the end of the quarter, our investment portfolio was valued about $203 million and the cost was about 2.2 -- $202 million. During the last five years we've made about 110 different loans to 62 different companies and we've been repaid or exited from 31 companies and the average return on the exit has -- exits have been about 15%. So the program is working in terms of our returns. No loans today are past due. All payments are current. To date all of our investments have had a positive IRR and given the strength of the portfolio today we don't anticipate any change in that record. This all leads me to say that the program we set up when we founded the Company is working as we planned. We do not feel the need to change our strategy and take on more risk or try to do something different and for those people who want a very conservative portfolio of loans that perform very well then this is the Company to own stock in.

Our balance sheet is very strong today. At quarter end we had approximately $48 million borrowed on our line of credit and we have 159 million or so in equity. So much less than one to one in leverage. This is a very conservative balance sheet. We'd like to move it on up to about one to one and that's our plan over time. The numbers for June quarter were behind our desired results, but we're building strength now and I -- I think will lead us to a stronger period in the future.

For the June quarter, net investment income, which is before appreciation, depreciation, gains and losses, was about $4.8 million versus $4.4 million for the quarter last year. That's an increase of almost 10%. For the nine months, the number was $1.25 per share versus $1.16 per share last year for the same period or about a 7.7% increase. You'll notice in our financial statements a line item for expenses of stock options, the deduction is for about $202,000 for the cost of those stock options. That's deduction for GAAP reporting and not for tax, as you know we pay our dividends based on our tax return so that 2,002 expense will have to be added back for determining taxable income for the year. It's about $0.01 a share. We'll have this deduction for stock options in our financials for one more quarter and it'll end on September 30th, 2006 because all of our stock options expire on that date.

Net investment income was about $0.41 per share for the quarter as compared to $0.38 for the same quarter last year and obviously if you added back the penny for the stock options we'd be at 42. In this presentation we're talking about weighted average, fully diluted common shares when we use the per share numbers. That's the most conservative way of putting it. Want you all to know that we're working hard to place more loans on the books and hopefully we'll place loans on the books that pay out -- don't pay off early. We had good production for the quarter but the payoffs were heavy and caused us not to grow our assets.

Now I'm turning to unrealized and realized gains. This is a mixture of appreciation, depreciation, gains and losses and for the quarter ending June we had a realized loss on $100,000 on one of the loans that we sold and unrealized gains were about $850,000, positive, that was a nice pop up in value. So net realized and unrealized is about $750,000 and that's certainly a good quarter. The unrealized gains reported during the quarter are primarily determined by standard and Poor's or S&P. Who are -- who we believe are very conservative in their evaluation of our loans. They're using a market test for our loans based on the many loans that they follow. I think there's some 20,000 loans that they follow at S&P so they have a good handle on what the loans could be sold for.

We are the only business development company or BDC that has Standard and Poor's valuing each one of other loans every quarter. I know others have very con -- various consultants like Duff and Phelps or Houlihan Lokey that come in and give them oversight on how to value but that's just oversight. S&P for us gives us an exact dollar value for each one of our loans. We don't always agree with S&P but we get a number that goes into our balance sheet. We think this eliminates the worry that shareholders may have that we're not writing down poor loans, that we think this is a -- this is good for shareholders, good transparency for shareholders to have an independent party give you the shareholders the value of our loans rather than us telling you what we think the value of those loans should be.

Now I'll turn to the bottom line, net increase and net assets from operations. This term is a a combination of net investment income with appreciation, depreciation, gains and losses and for the quarter, this number was about $5.5 million versus $3.9 million last year this time. So this June quarter we're about $0.48 per diluted share versus last year at $0.34 per share, an increase of 41% per share for the three months. A really good showing for the three months. For the nine months, that number is $1.71 per share, for this year versus $1.17 last year and that's a very good showing as well. Paid in kind interest, we didn't have any for the quarter ending June 2006. As of April 1st we don't have any loans with paid in kind income, or PIK income. We don't have the original issue discount running through our -- our income statement, both of these are non-cash impoin -- income numbers. This is very important point because there are other finance companies and business development companies that have a very large portion of their income from non-cash sources. So that non-cash income has to be paid out as a dividend because that's one of the requirements as a business development company. Even though it's not been received, so those companies must borrow from the bank in order to pay their dividends. On the other hand, the money we receive from interest payments is the money we have available to pay dividends and this is a very conservative way to run our business and it's the way we like to do that.

All of our portfolio companies are paying on time as agreed and the portfolio keeps getting stronger as the economy gets better, the value of our loans is now higher than its cost so all of this shows very good strength. Our average rating on the -- for the quarter, this is our risk rating, remained relatively unchanged. The risk rating system we set out is -- is about 6.9 for this quarter versus 7.1 in March 31st ending quarter. It fell a bit because we've been putting some large syndicated loans in the portfolio and their risk rating is a little bit lower, this risk rating system that we use doesn't take into account the size of the company and we believe we can take a bit more risk if we are lending to much larger companies. So these loans have come in at a little bit lower risk rating on our scale. This system gives you the probability of default based on what we think's going on and the portfolio has a scale from 0 to 10 with 0 representing the highest probability of default. So we see the risk rating here as staying relatively low and are quite satisfied with our current portfolio mix.

Since the last time I talked to you, the senior and sub-debt marketplaces for large middle market companies has continued to be robust, the large loan marketplace is in -- this is the large capital market that's run by Wall Street investment bankers. We did see a crack in the market at the end of June. I can't tell you if this is the beginning of a cooling in the debt marketplace. It -- companies that are getting ratings from the rating agencies have continued to get good financing and -- and just a slew of them came to the marketplace at the end of June and so demand didn't take care of all of the supply and as a result, we saw some spreading -- widening and interest rates continued to go up a little bit in that marketplace. The investment bankers keep bringing on tons of new financing to the market so this may be a blip or it may be a beginning of a change. For senior syndicated loans of 200 million or larger rates have continued to be in the good range of 2 to 2.5% added to LIBOR. The riskier ones have been higher at say 3% to 3.5% above LIBOR. This kind of a two tier marketplace now with some higher risk having to pay more, this pretty normal in the marketplace when you see a lot of supply come to the market. This may be the top of the market and spreads may widen over the next six months. We'll just have to wait and see. For those who don't know, LIBOR is the lender and interbank rank -- rate which is recognized I think as one of the leading indicators of short term interest rates and LIBOR is about 5.4% today so when you add 2.5% to it, borrowers are financing their companies at about 7.9% and that debt money is -- is right on the norm, more or less, 8 to 9 -- 7 to 8% is about the range that they should be in with LIBOR averaging over the last 10 years, probably 5 to 6%.. So, we're in the normal range for LIBOR. Things are humming along and we expect these larger companies to continue to get good financing.

Demand for loans in the big capital marketplace by non-bank lenders like hedge funds and bond funds for rated loans is still relatively high. It's a very strong marketplace. The equity marketplaces have not been that strong and I think until they do, the demand for debt will continue to be strong. Demand for senior loans today and for second lien loans is -- is good and we're getting our share. Unfortunately, many of the second lien loans are paid off over time.

Our small companies and their loans, the world is certainly different there. There are no pressure from syndicated loans although there have been some syndicated loans below $100 million. This sub $100 million market is new an we see that continuing to go on as investment bankers continue to push loans into the syndicated loan marketplace as much as they can. However, syndications have not moved down to our area of 5 to $15 million loans. I don't think they will. The small loan marketplace that we invest in is not seeing much competition from banks. If you remember banks are doing short term loans and we tend to do long term loans, meaning 5 years loans. But small loans tend to have more risk, so you wouldn't have many bankers doing that any way. We have to compete for those loans in the small end of the marketplace from small private lenders like SBICs and Mezzanine Loan Funds and a few hedge funds are there and some of the smaller business development companies. Our loan request pipeline is still strong but our criteria for loans remains very fixed on solid fundamentals and we don't intend to ever alter our credit lending standards to make our loan production better. Our goal is to be a strong profitable Company, not the biggest Company around.

We are concentrating -- continuing to concentrate on variable rate loans so that we won't be hurt if the Federal Reserve continues to increase interest rates. We're certainly happy to see the Fed chairman is talking about not increasing interest rates again, at least I think that's what he said. It's a bit confusing when he gets in the marketplace and talks. We have in place today an interest rate cap to cover any fixed rate loans. This is commonly called a derivative and we're in the money in our derivative so we do have room for about $35 million worth of fixed rate loans should we decide to do that but we probably won't do any of those until we are sure that interest rates have pretty much stopped going up. All our old fixed-rate loans, as I mentioned before, have been paid off and all our loans are now at variable rates and that'll certainly protect us against increasing interest rates so we're well protected against increasing rates and as rates stabilize we can move into some of the fixed rate loans.

We continue to worry about the cost of oil. It's having a pretty dramatic effect in the economy. Takes money out of the pockets of most of the middle class and lower class folks so that they don't have the money for restaurants or any of the durable or non-durable goods so we're -- we're confident that that's going to continue to have a dampening effect on that part of the marketplace. We've noticed that some of the mid-tier retailers are beginning to have some struggle even though some of the larger ones at the low end like Wal-Mart and K-Mart are doing reasonably well. We think that's just a trading down of people that used to shop at the larger stores that are moving down to those low end lines.

The amount of money being spent on the war in Iraq continues to hurt. Certainly we all support or troops in Iraq but the war is draining our economy and our federal and state governments continue to be out of control in terms of spending. Congress in my own estimation is acting extremely irresponsible in its spending and certainly that goes for the states at well -- as well. The last two governors of Virginia both said they they weren't going to raise taxes before they were elected but as soon as they got in they pushed to raise taxes and are rushing to spend all the surpluses that they have. So, we just continue to watch these governments spend money that they really shouldn't be spending.

Trade deficit with China continues to be a problem. China continues to subsidize their industries to the disadvantage of our businesses. It just makes you sick to watch the currency not float in China and keep -- they just keep subsidizing it that way. And we wonder how much longer that can go on. And we're watching the impact of the downturn in the housing industry. We're trying to gauge how much impact that's going to have. The housing industry is coming down relatively quick. It doesn't look like a soft landing and certainly the auto business continues to have trouble, at least GM and Ford. The foreign manufacturers who are making -- who may be called foreign manufacturers, many of them are manufacturing here are showing good results so I'm not sure how that's going to shake out either.

Even though we talk about all these negatives and worry about them in spite of all of those negatives, the industrial base of the U.S., the smaller and mid-sized businesses and certainly many of the large businesses have kept their costs down and their profits are improving and manufacturing is not operating at full capacity and even though they're hiring people they're not hiring at break neck paces and they're certainly building back logs.

So these factories and these things that are going on in the economy now should continue to translate into good loan environments for us and other lenders. Just so you know, we do anticipate that we'll update our shelf offering. We don't have any need for capital today. We've got plenty of capacity in our line of credit so there's no dilution coming in the near term, no reason to go out and sell new stock. But we do keep that up-to-date in case we need it. As you know, the dividend was increased by our Board of Directors in July. The dividend was four -- was increased to $0.14 per month, a run rate of $1.68 and with the price of the stock at 21.80 as of yesterday, the yield on the stock's about 7.7% so that's a nice return.

And summarizing -- would you please go to our website and sign up for our e-mail notification. You should be on that list and you can also sign up for the little newsletter that we do. You have to go to Gladstonemanagement.com to do that. In summary, as far as we can see out right now, business looks good. We can see a couple of quarters out so we want to be careful. It looks good for us right now. We are stewards of your money and of course I'm the largest shareholder so we're stewards of my own money so we'll stay the course and continue to be conservative in our investment approach, credit cycles do change and when they come, the come very fast. So, we want to be prepared for that. At this point, Jen, if you'll come back on and tell them how they can ask questions we'll open it up for questions.

Thank you, Mr. Gladstone. (OPERATOR INSTRUCTIONS) Our first question is from John Maier with UBS.

Hey, David, how you doing?

I'm fine, John.

Quick question for you. As of March 30 -- March 31st of 2006, the weighted average yield was 12.7% and now I'm seeing that it's 11.7%. Looks like a pretty big drop. I'm just kind of curious why that's the case.

We put some second lien loans on the books and of course some of our older loans at higher rates have paid off so it's come down some. I think it'll come down a little bit more over time. It's hard to say where it'll stop but I don't think it's much further down.

All right. Thanks a lot.

Any other questions? That's it.

Our next question is from Henry Coffey with Ferris Baker Watts.

Good morning, David.

Good morning, Henry.

How are you, sir?

Good.

Two questions. First is my favorite subject, how are you -- what advances are you making towards getting more leverage and -- and perhaps even a securitization facility for either you or the whole -- either for GLAD or for the whole Gladstone Group? I know you've been talking in that direction for some time.

Yes, we have just begin to look at that. We're putting together the paperwork on it. I -- it's certainly not going to happen before September and if it happens, I would say it'd be wintertime. There's no push. We've got room in our line of credit to probably go to $150 million so we probably got 60, $70 million worth of room in the line of credit.

And -- and you would be willing to leverage the whole -- the balance sheet in that fashion? You don't need -- in other words you have $60 million of new capacity and you don't need to raise equity to get there?

I don't think so. We'll have to judge that as we go along. We work with the securitization folks. We've had a number of them come through recently, just to sort of get up the learning curve to make sure we understand what's going on in that marketplace and it seems to be still a very, very robust marketplace for securitization and we might as well take advantage of it. The nice thing about it is you lock in some good long-term rates, whether variable or fixed, and it's not -- it doesn't have recourse back to the Company, so all of those are very positive ways of the doing it and so we're -- we're looking at it very actively right now.

What about -- I know you talked about the internal rate of return and the total portfolio being about 15% and that on balance you haven't lost anything. May -- maybe you could talk to us about the -- how you've made money in some of your tougher loans.

Thank goodness we haven't had a lot of tough loans. What we've had is we've guessed exceedingly well on almost all of the ones that we've been in. That is, we'll do a second lien or a subordinated debt of some kind and within -- unfortunately in some cases it's come in 6 to 12 months after we made the loan that the senior debt marketplace has been so frothy that they've come in and said we will give you -- we will expand your senior line and you can pay off your second lien and so we've guessed correctly that these are great companies that they didn't -- they shouldn't be paying second lien rates, which are usually 6 or 7% over LIBOR and sure enough within a short period of time that guess has proved correct and the banks have come in. In a few of the ones that we've had in problem loans, it's been an old skill set that many of us, as you probably know, Henry, I don't know, we've got the average person here in the managing director level, which is the people that do most of the transactions, the average experience level is about 22 years so as a result of all of us having been through many credit cycles before, you develop a skill set in working out problem loans and to date that's worked very well for us. And I hope we don't have anymore problems but if we do, we're ready to get to work on them.

Well, thank you, sir. Good quarter.

Okay. Next question from someone.

Our next question is from Richard Shane with Jeffries & Company.

Hi, David, this is actually Robert in for -- in for Richard today. Thanks for taking my question. The -- we saw some prepayment fees this quarter and I'm wondering if we should be expecting those going forward, given sort of a baseline level of early repayments of loans?

Yed, it's really hard to know. Some of them, Robert, have prepayment fees in them, some of them have just some up front fees, so it's -- it's just very hard to tell you how many of those are going to pay off, which ones. Some of them don't have prepayment penalties and when those pay off it's a sad day because you don't get any extra bump. But it's -- I would say you should expect some but we just don't know how much.

Was there anything -- I mean, it's -- there was somewhat like $600,000 of prepayment fees this quarter. Was there anything extraordinary this quarter that caused a bump there?

No, I don't think so. We had quite a number that came through this time. This was a 40 some million dollar quarter of prepayments so we're going to have another quarter of $40 million prepay you're probably in that range again. It's just difficult to know.

Okay. Great, thank you.

Our next question is from David West with Davenport & Co.

Good morning, David.

Good morning, sir.

Somewhat as a follow up to Henry's question, when you were describing some things going on in the market, is that circumstances as you described that is kind of would occur on Advanced Home Care? It looks like that one is one that subsequent paid off and then you've reentered the market I guess in a syndicated loan fashion?

The second lien paid off there so it's -- we don't like to talk about the individual loans but yes, that's true.

Okay. All right. It also looks like in the Q you had I guess some term sheets out to some credits totaling about 25 million. I guess that's a hard thing to predict when you're in that stage but do you have some optimism that those loans could possibly close here in the current quarter?

I think they'll close. You know, we don't usually issue term sheets and have them fall apart. They -- it happens but it's not as frequent as -- as perhaps some others. So we're pretty optimistic about that pipe -- that part of the pipeline. As you know, we put $40 million worth of loans on the books for this quarter that ended June and that's not a bad quarter for us. It's just the prepays were so horrific that kind of took us back to square one. So again, the pipeline and what's going on in the marketplace, you read the -- the notes as well as we do. It is a very nice marketplace. If we could just stay like this for the next three or four years it would be quite nice because I think we would eventually build up the portfolio to a nice point in time in which the dividend would increase quite nicely as well. But what's going on in the marketplace now is a lot of people are trying to figure out if this is a crack in the market and that we've kind of topped out and there's a chance that we'll go back the other way. Nobody knows of course. We can all just keep our ear to the ground and do the best we can in trying to figure that out.

Very good. And last question kind of concerns the -- the option grant or the termination of that program. Guess I'm still struggling a little bit to get a better handle on how that could affect reported results. If I'm reading things correctly, the vast majority of your options are reported in your fully diluted calculation I think a little over 300 are not. And given the difference between the average exercise price and your current stop price, am I right in assuming that the -- the possible fourth quarter financial impact of that event will be -- will be relatively modest?

That's right. It should go down. We had to make an adjustment to the -- that's how the 202 came in. $202,000 came in. We had to make an adjustment because of the change in those options. They all had to be revalued. Lucky enough, the options were expiring at the end of September so the impact wasn't that great. But for the quarter ending September, we should just be doing it for that quarter. There won't be any revaluations so it'll be pretty mild. Thanks very much. Okay. Next question.

Our next question is from Lee Carter from Oppenheimer.

Good morning David and Chip.

Good morning, Lee.

Pretty nice weather out here. A little warm. What is your benchmark for -- I believe your interest rate that the stockholder is guaranteed before the 20% sets in, is 7%? What benchmark do you use for that? Book value?

Yes, we use the net asset value.

Net asset value. So should that go up, why then that benchmark, of course would go up too?

That's right. That's sort of the double edged sword. If you have a great portfolio and it's increasing in value that means the 7 point goes up so it's quite nice for shareholders.

There's a plus there then, I guess. Okay. Then, you said the average return on pay off of about 15% on the loans that closed?

Yes.

Is that before or after your fees or what -- in case you are on the 20%?

That would be before. This is currently -- this is the gross number before anything. That's -- that's the number that we calculate. What is the internal rate of return for that portfolio.

Portfolio. Before fees? That's the way everybody does that, Lee. Yeah. Okay. That's -- if -- let's see, how would I put that? You've got a simple formula on gain. 9, 3, 3, that a broker can understand. Do you have a similar formula for GLAD?

I'm --

You know what I'm talking about, the first with no leverage, 9%, leveraged up once. I know the 3 and then a 3. Do you have a similar --

You've lost me, Lee, I'm sorry.

Did I lose you?

Yes, sir. What are you talking about, 9, 3, 3.

Okay. On gain.

Yes?

You've always said if you weren't leveraged it would be a 9% return after expenses.

Yes.

Then it would be if you got leveraged up once it would be another 3% and then second time if you leveraged twice it would be another 3%. So it comes out to 15% return to the stockholders.

On two to one leverage projected out, yes.

Correct. Okay. I was wondering if you had a simple formula like that on Gladstone.

I think the formula or is more or less the same, Lee, because in this Company, you're doing mostly loans or second liens so it should be similar.

Okay. On a lot of the loans you make, there's -- these other funds are making humongous fees. We used to say that the fees would cover any losses. Did the fees on the loans go to management or do they go to the stockholders? The fees that are -- you receive on the loans that you put on new on the books.

Yes, they go to shareholders but they take a circuitous route and I'll walk you through that. The management company actually provides the effort to do that so the fee comes into the management company but then it's credited against the 2% fee, the base management fee and so in essence you get it. It just has to wash through the management company and you'll see that as a credit. You look at the P&L, look at that number down at the bottom after -- I'm trying to remember what we call it now. We had a lot of discussions with our accountants on how to do it. But if you look at net investment income before -- before there's an expense, there's a credit to the management fee collected by Gladstone Management and that number in there.

Well, gentlemen, just keep up the good work. Things are coming our way. Thank you.

That's true. Next question, thank you, Lee.

(OPERATOR INSTRUCTIONS) Our next question is from Joel Houck with Wachovia Securities.

Thanks, David. I'm wondering, one of your peers just did the first ever public debt deal for BDCs and were rated investment grade. Not to comment on the Company but what that might mean for the BDC workspace in terms of maybe more companies going public, given the -- it seems like the capital markets bigger than debt markets have been very receptive to this business model and given your kind of long history in this space, just interested in your thoughts on the matter.

Well, I'm aware of that but what we're also aware of is the last three BDCs that tried to get out of the box all had to pull in and didn't make their offering so I'm not sure the pace space is ready for a lot of new BDCs to go into the marketplace. That is, the last three that filed, in essence, decided not to go public because there wasn't enough interest in it. So I don't know, Joel. I wish there were more BDCs in the marketplace because I think by on a comparison basis, if you compare us in terms of quality of assets and if you compare us in terms of quality of income, we'll stand out much higher than any of the others in the marketplace and as a result of that, it would be very good for us if more people came into the marketplace. So we were very disappointed that the last three BDCs didn't get out because that would have been three more comparable points to -- for people to look at and again, we just think we run our business a lot different than most BDCs and I think BDCs are still in the development stage, unfortunately like REITs were in the '80s. People have not gotten used to business development companies and they're still not a great receptivity in the marketplace. Otherwise I think our stock would trade at two times book rather than at 1.6 times book.

Just as a follow up, is there something in your view that could increase that receptivity? Is it -- obviously people aren't that receptive to blind pools but if more companies brought real portfolios to market, do you think that would make a difference?

Well, you know the folks in Texas, and I don't want to slam them in any way, because I think they run good SBICs, tried to come to the marketplace. They had -- certainly had the experience and they had the portfolio and they could not get that sold and I don't know why. I thought that was a very nice transaction. But at the end of the day they didn't get to the marketplace. So I'm not sure it's blind pool is what's keeping them out of the marketplace. I think it's still people just don't understand the BDC space and there are not enough of us and a lot of negative reports out there on BDCs written by analysts like you folks and so as a result, you end up with people not liking BDCs.

Okay. Thanks, David.

You're welcome.

And Mr. Gladstone, I'm showing no further questions at this time.

All right. We thank you all for tuning in. For those of you who want to hear the story on Gladstone Investment we'll be doing that tomorrow at 9:30 too. Thank you all very much and good bye.

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.