Intellicheck Inc (IDN) 2005 Q2 法說會逐字稿

Good morning, ladies and gentlemen. My name is Jessica and I'll be the conference operator today. Welcome to Intelli-Check 2005 second quarter earnings conference call. [OPERATOR INSTRUCTIONS] This call is being recorded and is copyrighted, therefore, it cannot be recorded, transcribed or rebroadcast without Intelli-Check's permission. Your participation implies consent to our recording this call and placing it on our website. If you do not agree to these terms, simply drop off the line. Before I turn the call over to Intelli-Check, I'd like to read the forward-looking language. Certain statements on this conference call constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amendment.

When used on this conference call, words such as expect, believe, intend, will, and similar expressions as they relate to the Company or its management, as well as assumptions made by, and information currently available to, the Company's management, identify forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. Additional information concerning forward-looking statements is contained under the heading of risk factors listed from time to time in the Company's filings with the Securities and Exchange Commission. We do not assume any obligation to update the forward-looking information. With that aside, I'll turn the call over to Mr. Mandelbaum.

Thank you, operator. Good morning, ladies and gentlemen and thank you for participating in the conference call. We will have a presentation by both Ed, to highlight the financial outline of what we released last evening, and then Todd will give an update on our current sales and marketing initiatives. But before I turn it over to Ed, the Company has received several inquiries as to why we chose to do this raise at this point. And in response to that, we had sufficient capital at the end of the March quarter, which is prettily obvious from looking at our balance sheet as reported, however, we believe that some of the government initiatives are ready to mature.

And knowing how the government operated, we felt it was very wise to have a very, very strong balance sheet going forward because when the government makes the decision to actually start a roll-out of a program, they look strictly at one thing, do you have sufficient cash to be here for years to come? Because they do not like to get involved, it's a very simple analysis, unless they know the capital exists to go out not only one or two, but to go out for the potential length of the program. And that is why we chose to do the capital raise at this time. At this point, I'll turn the call over to Ed, who will highlight the financial results that we released last night. Ed?

Thank you, Frank. Good morning, everyone. As Frank mentioned I'd like to discuss some of the pertinent financial information that is contained in our 10-Q for the second quarter ended June 30, 2005, which we filed last night. I'm happy to report that the results of operations for the second quarter of 2005 had been one of the best in the history of Intelli-Check. Reported revenues for the second quarter of 2005 increased 284% to approximately $997,000, compared to approximately $260,000 for the second quarter of 2004. Actual sales bookings in the second quarter increased 259% to approximately $1.145 million from last year's quarter sales bookings of $319,000. This increase was primarily due to a large software sale to a significant retailer we announced back in June.

Due to the unpredictability of when some of our large opportunities will develop into sales, it's difficult to compare period to period results as we still face long sales cycles, particularly in the government sector. Todd will walk you through some of the details of our current pipeline of sales opportunities and why we remain extremely opportunistic about our expected future sales growth later in the presentation. Our gross profit percentage increased significantly and amounted to 88.4% this second quarter 2005, compared to 55.5% of the second quarter 2004. This percentage increase primarily resulted from the large sale -- a software sale made in 2005 at very high margins, compared to a larger portion of sales of our bundled hardware and software products made in the 2004 period.

Total operating expenses decreased by approximately $1.725 million from that of the prior year's quarter, to 1.083 million for 2005. This was primarily related to a decrease in non-cash expenses from the extension in valuation adjustment of stock options outstanding totaling 1.446 million and a reduction of legal fees of approximately 230,000, relating to the Tricom patent litigation. The reasons prior stated, we reported a net loss for the second quarter ended June 30, 2005 of $181,843, or $0.02 per share, compared with a net loss $2,768,297 or $0.27 per share for the quarter ended June 30, 2004. Non-cash expenses for the second quarter of 2005 were approximately 73,000, compared to to 1.560 million in 2004. At this point, I'd like to review the Company's liquidity and capital resources. Net cash, including cash equivalents and short-term marketable securities and investments, decreased for the six-month ended June 30, 2005 by $1.812 million, primarily as a result of the net cash loss of $1.433 million for the period.

However, I'm pleased to state that after the recent successful completion of our private placement of 1,250,000 shares of common stock which raised $5 million. We received proceeds net of commission and before other expenses of $4.650 million. I estimate that these other expenses to be paid out to be approximately 290,000, which will leave us with net proceeds of approximately $4.360 million. We also issued five-year warrants to purchase 500,000 shares of our common stock to investors and 125,000 shares to our investment bankers at an exercise price of $5.40 per share. Should these warrants be excised the Company would raise an additional $3.375 million. As of August 9, 2005, after including the net proceeds from the private placement and after deducting the 290,000 in other expenses, we had approximately $7.4 million in cash, cash equivalents and marketable securities. Our cash is invested in short-term, high grade commercial paper, CDs and bonds.

We expect our cash expense burn rate for the remainder of 2005, which excludes any margin on sales and the resulting commissions on such sales and excluding capital expenditures, on average to be approximately $350,000 per month. We anticipate that our current available cash on hand, cash resources from expected revenues from the sales of our products, including the sales of our units in inventory and licensing of our technology will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months. As Todd will explain, we've been actively marketing our newly announced products and technologies, the licensing and integration into other complimentary systems and technologies, as well as standalone applications.

Potential opportunities in these markets could result in additional cash flow for the Company. Frank?

Thank you, Ed. Before I turn it over to Todd, who will run you through that, I would just like -- failed to mention that on the call with me today, beside Todd and Ed is Russ Embry, our Chief Technology Officer, and all of us will be available to take any questions you will have at the end of Todd's presentation. Todd?

Thanks, Frank. As you guys can see by the results of operations that we released last night, Intelli-Check has been making excellent progress over the past six months. Our pipeline continues to grow and we're moving into new and exciting areas for our technology. I would like to highlight some of the major opportunities that we believe could have substantial impact on Intelli-Check over the next several quarters. I'd like to begin with our financial vertical market. A few months ago, we announced a multi-year agreement with Verifone. I'm happy to report that phase one of our development was completed this week and it is in final quality assurance with Verifone. We anticipate beginning multiple beta site tests in the next seven to ten days with our own customers and as well as Verifone customers. We anticipate that the beta tests will last for approximately four weeks, at which point we'll be ready to go for a general release of the product.

We have several high profile trade shows that we expect to attend in conjunction with Verifone over the next few months, where we will formally introduce our product to this channel. I believe it is important to reiterate the economic potential for just this opportunity. As we've recently emphasized, we are looking to move into business lines that have a recurring revenue stream. This particular opportunity will be a subscription-based model, that is a recurring monthly fee for the use of our proprietary technology. Based on industry published numbers, Verifone ships approximately one million terminals per year in the U.S. and Canada. Our initial goal is to have our software reside on 5% of their annual shipments, or roughly 50,000 terminals per year. Although we do not set end-user pricing, we believe that the suggested retail price for this technology will be between $22 and $28 per month.

The pricing models we have put together proposes that we'll receive at least one third of the monthly subscription fee. Based upon these assumptions, we also believe that the revenue stream for Intelli-Check could be approximately $5 million per year just from this initiative. This is a pure software play, so virtually all of the dollars drop to the gross margin line. And that is only for year one. If we're able to maintain the same 5% penetration in year two, you're now looking at the potential for $10 million in annual revenue that year and this model would continue to grow years beyond. Should we prove successful in penetrating this market upwards of 5%, I believe you can quickly see how explosive this opportunity could be. In addition, we're exploring ways to broaden our reach in this particular market as it is an exciting space to be part of.

On the retail side of our business, we're making excellent strides. We previously announced a major win last quarter with a significant retailer. This win has spurred a tremendous amount of interest in this particular vertical market. Because of this success, we've strengthened our relationship with one of the largest financial services companies in the world. Their clients include the who's who of retailers in the U.S. I'm pleased to report that over the last two months we have been involved in multiple revenue producing, custom development projects to assist them with implementing our technology into their business processes so that they will be able to introduce our technology to their customer base. We believe that this opportunity has the potential to begin generating revenue for Intelli-Check by the fourth quarter of this year. In contrast to the large software sale made with -- in the last quarter to the significant retailer, the exciting part of this opportunity is that it has the potential to include a recurring transaction revenue piece as part of the business model.

Another major opportunity that we've been discussing for the past several months is Certegy. I'm happy to report that Certegy is ready to go live with our technology sometime this month. We anticipate that the transaction fee revenue from this customer will begin later this quarter and ramp up over the next several quarters. However, it is to be noted that they're currently purchasing standalone systems from us for other applications. The ongoing test with the major wireless carrier is proceeding well, as they determine how best to utilize our technology. We continue to make excellent strides in the age of verification market. The key for Intelli-Check here is to put as many feet on the street as possible in the form of resellers and distributors. We sell direct when appropriate, but with our limited sales resources to date, we've not penetrated this market to the extent we believe possible. Building a robust distribution channel will have a material benefit in this effort.

Towards meeting this goal we've signed up several new resellers during this past quarter. We are currently targeting resellers from very specific niche markets where we feel there's tremendous synergy with our product, such as POS and hospitality markets. We are becoming more selected in signing on new resellers to make sure they truly understand our business model and are going to dedicate significant resources to selling Intelli-Check products. Additionally, we have signed up our first Canadian distributor. This particular distributor focuses on a number of key Intelli-Check markets, including hospitality and casinos. We are also going back to our large installed base in introducing our new products such as the ID-CHECK POS, which is the Verifone terminal, and our ID-CHECK Mobile, a handheld device to create additional revenue opportunities for Intelli-Check. We are making progress on both federal, state and local levels with government opportunities. A new market segment in this vertical that we're actively going after is the police cruiser market.

We've signed up specific resellers in this market who have integrated our technology into their overall applications. Our partners plan to announce these new products and applications at a series of upcoming trade shows this fall. On the federal side we continue to work with the Department of Homeland Security and other partners for integrating our technology on a variety of handheld applications where our technology will be used for verification of driver's licenses as part of the first responders initiative. The driver's license verification technology is one important piece of the overall solution that is being incorporated into this hardware. We anticipate our first order from this opportunity to be later this year, with the continued roll-out into 2006.

As you can see from the recent statements of Digimarc and Viisage, two of our partners, our technology is being utilized as a component of their solution to accompany the provisions of the recently enacted federal legislation affecting driver's licenses, which we believe could lead to additional significant opportunities. I think it is important to discuss the overall strategy of the sales and marketing group. As I mentioned earlier, we are committing to putting feet on the street for the age verification markets. However, in the other vertical markets where we believe our technology has applicability, we'll continue to work with our partners and have them integrate our technology through our software developer's kit . In many cases we are a piece, albeit a very important piece, of the overall solution. These partners already have access to the customers and most times are intimately involved with their overall business processes. We don't want to have to reinvent the wheel and would like to be able to leverage their technology expertise and sales force whenever possible. We believe that we're being successful in this effort.

In addition, we are in the process of forging strong partnerships with the various hardware vendors in the market that have applicability in reading bar codes. We are currently working on a number of initiatives with them to cross sell each other's solutions. We believe there's tremendous potential with such relationships and we're pursuing them aggressively. We are also looking very closely at two additional vertical markets -- the healthcare and automotive markets, where we believe there are excellent synergies for our product. In fact, in one of these verticals we have two high profile customers already working with our technology. The recent capital raise will enable us to increase the sales force to more efficiently pursue these opportunities. In closing, I've attempted to highlight some of the major opportunities we're currently involved with. However, this presentation is anything but complete since our pipeline of opportunities is strong and continues to grow.

We're excited and encouraged about the very strong partnership and relationships we've formed over the past several months. We remain focused on executing the plan we've laid out, which is what the sales and marketing group at Intelli-Check has committed itself to do. Thank you for your time and I would now like to turn the call back over to Frank.

Thanks, Todd. That completes the formal presentation. Operator, at this point, we would be pleased to answer any questions that the listeners may have.

Thank you. [OPERATOR INSTRUCTIONS] Our first question comes from Robert Lambert RLR Capital.

Good morning, Frank.

Good morning.

Could you give us a little review of all our initiatives with the government? I know that there has been the registered traveler and there's been decus and, of course, now, first responders. But just for the new -- anybody new on the call or anybody -- we've been hearing it for a couple of years, as we all know. But I just thought that at this point in time, maybe things are starting to move, finally, with the government?

As Todd mentioned, we're actively involved in one of the most significant programs in the government called First Responders. That's an initiative of both the Department of Homeland Security and the Department of Defense. The reason for it, Secretary Chertoff, if you noticed about a week ago when he made his presentation, he had changed around what they now stated, particularly in light of what had happened in London, that the goal is preparedness. And that is the First Responders, God forbid that there's an incident in the U.S., they'll lock down an area, determine who's coming in and who's going out, and we're part of the vetting process in that.

On the DCAS[ph], which is now also the FIX, the FIX program. I was just in Washington two weeks ago, on the weekend, for meetings with AAMVA, the American Association of Motor Vehicle Administrators, and that had to do with dealing with the Real ID Act. And one of the people from Department of Defense made a presentation on the DCAS. It's now being handled out of the Defense manpower command center in Monterey, California, and they through up on the slide the participants and there was Intelli-Check, we still are involved in that. The problem that we have is that we know we're involved in these programs. We expect them to roll forward. But we do not have any particular indication for the specific date as to when they're going to happen. Be assured, should they roll into dollars, we're part of those programs.

As far as the First Responders, I mean, if my understanding is correct, there's over three million first responders. Can that -- I mean, I know that would be a huge government amount of money, but I guess realistically, could we think in terms of how much volume that would mean for these handhelds?

The only thing I will say is that the opportunity is quite significant. It is in the many hundreds of thousands of potential seat licenses for our technology.

Oh, great. Well, thank you.

You're welcome.

Hello?

Our next question comes from Robert Brenner with RM Securities.

Can you discuss the people that bought into the private placement, the lock-up provisions on this? There's been quite a lot of buzz about short interest in the stock. The stock fell down quite a bit after your private placement was done. Is this stock available? Is it lettered stock, obviously, are they going to be able to sell it around the world and play little games with it? Who are the people that got involved in this private placement and when will you release that information?

In response to the private placement, every one of the investors were quite reputable institutions or individuals with substantial capital. Their shares that they received were unregistered shares. The Company will be filing a registration statement sometime within the next week. And at that particular point, everybody will see for themselves the, let's call it, more than reputable institutions that participated in this. We do not believe that the decline in the stock was based upon any selling or short-selling by these particular investors. They have chosen to invest because they have done a tremendous amount of due diligence before they put up their money and we believe that they're committed to being with us as the Company starts to show the potential that it has inherently in its business model.

So we do not believe it was they who, as you put it, shorted or sold stock at all. We don't know what caused people to sell the stock. I had heard rumors, I had received calls from people that we didn't complete it, that we got less money than we had stated. Pretty obvious from the filing and what Ed said, we completed the entire private placement very successfully with very reputable institutional investors. And beyond that, the names I will not disclose, but they will be available because we will be registering the underlying shares and that filing will take place within a week.

Again, Ladies and Gentlemen, if you would like to ask a question, please press star, 1 on your touchtone phone. Our next question comes from Dan Morris with RF Lafferty. Our next question comes from Robert Brenner with RM Securities.

I'm sorry, I got caught off there. I just had another question, a follow-up. Have you had a potential to talk with any analysts on the street. Has anyone expressed any interest in the Company and what are we doing to promote ourselves and to try to get some respect from the street?

Well, the Company puts itself forward in the manner it believes is proper under all the current rules. We do have interest from companies and we do have interest from analysts with company, I cannot predict what is going to take place at what time. But there is a lot of interest in the Company, particularly in the securities space at this point. But I am not in a position to predict when anybody may begin the coverage on the Company.

All right, thank you.

Our next question comes from Trey Snow with Priority Capital.

Good morning. Am I correct in assuming that you recognized the vast majority of the revenue from the software sale in the current quarter?

We recognized the --

In the second quarter, I mean.

the revenue from the large sale in accordance with our corporate recognition policies and it would be fair to assume a large portion of that was recognized in this particular quarter because it was a direct sale by the Company.

Okay. So, barring any other large orders, we'll probably see a return to more normal, or I guess historic revenue levels in the next quarter?

I would suggest that the only guidance, Trey, that we have given is that we have stated in the past, recently, that the Company has made a projection that its book sales for the year will be more than double last year's 1.5 million. And we'll stay with that. At this point that that we expect sales, book sales, for the remainder of the year to grow for the entire year to at least $3 million. So, I don't believe that by making that statement, what you've said is correct.

Okay. That's great. Thank you.

Our next question comes from the Dan Morris with RF Lafferty.

Good morning, everyone. I'm sorry I got disconnected when I tried to make the call before. I'm just trying to reiterate what Todd had said on the Verifone. And so I can get these numbers in my mind. Based upon the assumption of 5% penetration on the first year with approximately 11 million, could that be like $0.40 just on that deal alone?

Where did you come -- the 11 million number?

No, 5 million with 11 million shares outstanding.

I got you, I got you. Frank, you want to -- ?

On that one, Dan, in the model that we did, Ed has stated that we have a cash expense burn rate, so call it operating expenses, of about a little over 4 million, say 4.2 million at that number. That would mean anything excess would hit the bottom-line. Of course we'll have other sales and other profits.

That's what I'm assuming you'll have other sales besides that.

But would that contribute approximately $0.40 pretax? The answer is, the contribution to the bottom-line would be practically the entire sale. As Todd pointed out, it is a software sale only, on a revenue model. I mean, quite frankly when Todd said the potential of that could be dynamic, well, if you were to say, we've projected 5%. But if you're looking at, say, even 5%, 7%, 9% penetration in the third year, you're looking at $21 million in revenue because it's cumulative and it just keeps adding up. So this thing is something we're pretty excited about, as is Verifone.

Let me ask you one -- just to take it one step further. You don't have a exclusivity with Verifone so that that same product could be used for other people, is that correct?

That is correct. It's not that we don't have, we didn't give them.

Well, that's what I'm saying, you didn't give them the exclusivity.

That's correct.

That's correct. There were other players in that field and Todd had mentioned that this is a great place for us to be. And part of the capital will be to put additional feet on the street on the Company side to show this solution to other people where we believe it would have significant interest.

Okay. Well, thanks a lot. Congratulations on a great quarter.

Thank you.

Thank you.

Our next question comes from Richard Carp with GunnAllen Financial.

Good morning, gentlemen. Congratulations on a great quarter. Number one, I got cut off before so I don't know if you had mentioned, you had spoken in the past about initiative with the government on a approximately 1,000 to 1,200 unit scenario. Did that start, number one? Have units gone out? Is it software, is it units, what is it? Secondly, the Underage Drinking Act which I know that everyone has been waiting to see it be put before, has anything been put before Congress? Has that been put before? Is it something that's supposed to be coming in when they come back into session after the holiday? Two of my questions.

I'll answer each one, separately, if I may? On your first question is, what is going on? In the opportunity, I believe, the number we had stated was 123, we expect 123 units to ship to the First Responders sometime in the near future as the initial roll-out. But that thing is so big, there's been huge talk about it throughout the various states, that would be for the national capital region and, probably, more specifically, could be into the DOD for use at various facilities of the Pentagon. On the second question, the issue of the Underage Drinking and Prevention, the retail Act 2005. It -- we've -- the last intelligence we had had was that it was going to be introduced somewhere in the middle of July. That's now been pushed because of the recess. They're still expecting that Bill to be introduced after Congress return on Labor Day. So they're still optimistic. Of course we have no control over what day or when or how that will be put out. But we do believe it still has good interest in the Congress to be introduced.

One more question, all right? Any update on the court case that we have going on?

Well, we have -- we had several meetings at the court's instruction as to a settlement. We believe that we had a settlement with them. However, when it finally came back, we did not accept what they proposed for a settlement. We have additionally now filed a Sanctions Motion against the law firm representing Tricom, the Tricom people, because it was in discovery, evidence and ruled on the court, that they created false evidence to present in this case and the court's ruling stated that it is obvious to anyone that this evidence was created post-facto to deal with the inadequacies and inefficiencies of the case on the part of Tricom. So we have now filed a motion for sanctions for -- against the people involved in this sort of conduct. And if they do not settle, they have asked for a delay until the end of September. We want to bring this to trial as quickly as possible because we believe we have a very strong position, particularly in light of the recent patent that was issued to us.

Thank you and congratulations, again, on a great quarter.

Thank you.

Our next question comes from John Bendle, who is an independent investor.

Todd, this is to you. You mentioned Verifone and Cingular. Just listening to the numbers that you put toward, I heard someone else put a number out there which sounded relatively low. We just had someone work out the numbers. I know that's two of the deals you're working on. I suspect it's not the only two larger ones. I'm going to go ahead and say it, that I think the retailer of Target, you all didn't say it, I said it, a lot of buzz about that was something that no one believed it happened. It's probably the most sophisticated retailer, not the biggest, but the most sophisticated out there, so I have no reason to believe in these other two. It looks to me as though someone said $0.40. That number would be relatively low going out a year from now. If what you're saying, Todd, comes to fruition, and I have no reason to doubt that, you couldn't be double the amount with have.

Yes. I mean, I won't comment on the name of the companies you discussed, because we're under, you know, confidentiality.

I don't want you to comment on it. You know, I've spoken to other analysts who follow that Company.

Right.

And I've seen your system in one of the Target stores, so it's blatantly out there open so it doesn't take any rocket science to figure this out. That's yesterday's newspaper.

[inaudible - two at once] couple one. But I think one of ones that's just as exciting and it's being driven primarily by the significant retailer, the large retailer, is, you know, the deal we have with the large consumer finance company. You know, we've really generated our own competition, you know, positively between these companies because one person has it while the other people want to have it. So, we've done a good service to ourselves by generating, you know, a buzz in the industry. So I think this particular consumer finance company we're working with, they've got the likes of every who's who in the retailer. And it's just a very, very exciting opportunity to see the depth and the level and the speed that they're moving at. We're excited about that opportunity as well.

Let's focus on that a little bit and forget about -- not forget about the Verifone or Cingular because I think that's going to happen. I think that's a fait accompli. But let's think about this finance company. We're saying "if" on this, I know everybody has got to be careful on these conference calls, but we don't have to be so careful that we can't beat our chest a little bit and say we're darn proud of what we're going to be. If this comes to fruition, and it sounds like it's something you worked on a long time, are we talking $1million in revenue, if it were to happen, 4 million, 5 million? You got to be able to extrapolate somehow how this number will play out?

Well, I think it is -- we're probably a little too early to do that. As I said, it's going to be -- the exciting part is, again, it's going to be some type of subscription or transaction-based revenue model with some kind of support component. And that's what we want to be able to move towards is a predictable revenue stream for Intelli-Check, which Wall Street as well as Intelli-Check and model out and understand much better. These guys do, you know, a substantial apartment of business and I think -- you know, I don't think we're prepared, and Frank you're welcome to comment on what the revenue potential is. But I can tell you, that they have the who's who and you know they're beating on the drums to get this in front of their customers which we're doing so we can begin to roll this out. And you saw how significant it was for a large retailer we worked with. So, you know, there will be some economies of scale here that they'll reach by buying it. But we're excited about what this can bring to Intelli-Check.

Right. Okay, thanks. Congratulations. That's very, very impressive.

Thanks.

Our next question is a follow-up from Robert Brenner with RM Securities.

Can you discuss why Mr. Prendergast resigned? And this revenue stream that you just reported how do you account for that? Is that recurring revenue? Is it an IOU? Has it actually been paid to the Company directly straight-out?

Well, one, as we announced, Tom resigned from the Board of Directors for health reasons. He also was a Director of a another public company, he also resigned from that company. Tom recently had his second bypass operation on his heart and he just felt that the travel was too much for him at this point. He was a good Director, we remain on excellent terms. He's available to help us if needed. There was nothing other than what we said in the plain release. As far as the -- there is an ongoing revenue component from that large sale we made and in the out-years it's software maintenance after the first year. And as we stated in the press release, et cetera, we have already been paid for that sale.

You have something there on -- let me see. Is there a receivable factor? I mean, are receivables increased quite a bit, can you talk about that?

Well, our sales increased so naturally our receivables would go up under the terms. We do give credit terms. So, that's only a natural fall-out from the increase in sales.

Frank, the financials as Todd -- Ed, you can comment -- the financials that they have, though, show that the receivables as it is in the second quarter, but that's been, as you said, received in the third quarter, so that receivable would have gone down.

We actually got paid then so it's not something that's out there in the future like an IOU or anything like that?

No.

Correct.

All right, thanks for clearing that up.

Thank you. Again, ladies and gentlemen, if you would like to ask a question, please press star, one on your touchtone phone. Thank you. There are no further questions at this time. Please continue, Mr. Mandelbaum.

Since there are no further questions, we thank you all for participating in this conference call and we look forward to speaking with you again in the future. Thank you.

Ladies and gentlemen, thank you for your participation in today's conference call. At this time, you may all disconnect.