IDT Corp (IDT) 2009 Q3 法說會逐字稿

Welcome, and thank you for joining IDT's third-quarter fiscal 2009 conference earnings webcast. The webcast will begin with remarks by Jim Courter, CEO of IDT Corporation.

Good afternoon. This is Jim Courter, CEO and Vice Chairman of IDT Corporation. IDT's CFO, Bill Pereira, and I will be reporting to you on IDT's financial and operational performance during the third quarter of our 2009 fiscal year, for the past three months, February, March, and April.

The format of this quarter's earnings announcement incorporates several significant changes. First, we did not release our earnings over the wire this time. Instead it is posted on IDT Corporation's web site in the Investor Relations page at www.IDT.net. That's www.IDT.net. Anyone can read and download a copy of it there. In order to ensure that we comply with disclosure requirements, we also filed a release with the Securities and Exchange Commission. Distributing a long press release like the earnings release over the wire entails significant expense and is no longer the only disclosure method permitted by the New York Stock Exchange. Because we are focused on reducing our corporate overhead, we opted for this less expensive alternative.

In another significant change this quarter, we are soliciting and will answer your questions regarding the company and our third-quarter results in writing rather than on this call. Participation by shareholders in the old Q&A call-in format declined steadily during the last several quarters. Finally, during the last quarter's conference call, as you'll recall, no one had a question. We hope that this written format will elicit greater shareholder participation, particularly from individual investors. An earnings calls can be an awkward place to ask a question of management if you're not an analyst or fund manager. This new approach is more democratic, we believe. And we hope that anyone who has a question will send us an email. We also believe that written Q&A will improve the quality of both questions and the answers. Stockholders, potential investors, and other interested parties will have time to read and absorb our financial statements before putting questions to us. And we will have the opportunity to dig out the information you want and get input from others in the Company and put together what we hope will be helpful and comprehensive answers for you.

Finally, earnings calls are supposed to be about providing you with the information you want. From our perspective, answering your questions in writing allows us to focus on what's important to you. It is simply as well more efficient to carefully answer real questions rather than spend time preparing to answer questions that are never asked. After listening to our remarks and reading the accompanying earnings release, if you have a question for us, please email it to IDT investor relations at invest@corp.IDT.net. We will accept questions through the close of business tomorrow, June 9. Questioners should provide their name and firm name, if they represent a firm. If we can provide a constructive answer to your question, we will post your question along with your name and your firm's name and our answer on the Investor Relations page of the IDT web site as early as Friday, June 12, after the market closes. We will also file a form 8-K with the SEC containing the questions and answers. If you have any questions or suggestions regarding this process itself, please email us at this same address.

If you listened to this call on your phone last quarter, you probably already discovered that we made one additional change this quarter, changing to a prerecorded webcast-only format for these calls. This is made possible by our change to the Q&A format and is another cost savings measure. I thank those of you who are listening via the web for the first time for making that important switch.

Before we begin the discussion of the quarter's financial results, please recall that any forward-looking statements we make during the course of this call, either our prepared remarks or our written Q&A, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ materially from those which we anticipate. These risks and uncertainties include but are not limited to specific risks and uncertainties discussed in the reports that we file periodically with the SEC. We assume, as you know, no obligation to update any forward-looking statements that we've made or may make, or to update you on the factors that may cause actual results differ materially from those that we forecast.

During the course of our discussion today and in our prepared remarks and possibly in the written Q&A that follows, we will make references to adjusted EBITDA. Adjusted EBITDA for all periods discussed during our remarks is a non-GAAP measure representing operating income exclusive of depreciation and amortization, restructuring, and impairment charges, and in the current quarter the gain on the sale of an interest in AMSO to Total, Total of course the very large French oil and gas giant. It is one of several key financial metrics used by management to evaluate the Company and its segments' operating performance. The schedule provided in the earnings release reconciles adjusted EBITDA to the nearest corresponding GAAP measure, loss from operations as well as net loss, on a company-wide basis.

Now let's get started. For the quarter, many of IDT's businesses achieved significant operational improvements compared to the third quarter a year ago. Adjusted EBITDA was $14.7 million compared to negative $38.5 million in Q3 2008. This quarter also was our fourth straight quarter of positive Company-wide adjusted EBITDA. During that span we have generated a little over $46 million in adjusted EBITDA, which is remarkable I think when you consider that in the preceding four quarters from Q4 '07 to Q3 '08 adjusted EBITDA totaled a negative $152 million. That is a $200 million swing from one year to the next year.

However, adjusted EBITDA was down sequentially, as expected, from $21.2 million in Q2, 2009. Adjusted EBITDA at Telecom fell by nearly $4.9 million and at IDT Energy by $3.6 million. Although IDT Energy was able to boost its gross margin during the third quarter to almost 30%, that's 29.7%, from an already unusually high gross margin of 24.3% in the second quarter 2009, gross profit actually declined in line with expectations as the warmer spring weather reduced consumption, as anticipated.

Looking ahead we expect an increase in energy prices which would lead to gross margins in the 10% to 15% range, comparable to what IDT Energy achieved throughout the year 2008. The decline in Telecom EBITDA is primarily a function of declining revenues in both our two major segments, consumer phone services and telecom platform services. The telecom platform services segment, you may recall, includes wholesale carrier services as well as all calling card and other in-network services, including prepaid and re-chargeable calling cards in the United States and overseas, and our net to phone and cable telephony businesses. Consumer phone service is in harvest mode with revenue declining at expected rates.

While telecom platform services faces continued fierce competition pressure that has led to declines in both traffic and revenue per minute through both its wholesale and retail sectors. The decline in Telecom revenue, exacerbated by weakness in the global economy, will likely continue for at least the next several quarters. But we will be working to manage costs in line with any revenue decline. In short, EBITDA growth over the next several quarters will likely be constrained by these challenges.

For the year-over-year improvement in adjusted EBITDA has been achieved by adhering to the four elements of our turnaround plan. I've mentioned them, I think, in the last three conference calls. One reducing corporate overhead; two, shedding noncore businesses; three, streamlining our core businesses; four and finally, conservatively energizing new ventures with cash and, where appropriate, strategic partners.

First, thanks in large part to the leadership of Bill Pereira, and the hard work of the team of dedicated people, corporate overhead has been substantially reduced. In Q3 corporate SG&A costs were $5.8 million, fully 30.2% lower than a year ago after factoring out Q3 2008 one-time accruals of $10.5 million for a pretax litigation charge and a 3.3% lower sequential.

Second, we have shed numerous noncore businesses and refocused IDT on the telecommunications and energy businesses. Most notably, during the third quarter we followed through on our commitment to exit the debt portfolio management and collections business. The operating and restructuring costs incurred in exiting that business are substantially reflected in our Q3 numbers. And we should have seen the last meaningful impact on our bottom line from that divestiture.

Also following quarter's end, we announced the board approval of a spinoff of CTM Media Holdings to our shareholders. The businesses to be spun off are currently in our IDT capital division. They include the CTM brochure and media business, IDW Publishing, and WMET radio, operating in Washington, DC, metropolitan area, and other smaller advertising and media related ventures. As you know, IDT shareholders will receive one share of CTM Media Holdings' class A common stock for every three shares of IDT common or class B common stock they own as of the record date for the spinoff which will be set by our Board of Directors. We filed the requisite documents to effectuate the spinoff with the SEC in May and are awaiting the SEC's comments. We will also be updating our filings to incorporate third-quarter data. There are many factors that will impact timing, but we expect to complete the spinoff no later than early fiscal year 2010. We believe that this move will lead to greater overall value for shareholders as the sum of the two parts should be greater than the whole.

CTM Media Holdings will be headed by Mark Nolan, an extremely capable executive who has worked for IDT for almost 20 years. Under Mark's direction, CTM Holdings can thrive as an independent company. Even before this spinoff, IDT closed, sold, spun off, or otherwise disposed of quite a few ventures and initiatives. Going forward, the Company will consist of IDT Telecom, IDT Energy's ESCO businesses, and a handful of promising ventures. These promising inventions include our oil shale and alternative energy development projects in Colorado and Israel, as well as Zedge, our mobile content distribution business, Fabrics, a video content and storage platform, and IDT Specter, which leases the Specter licenses that we acquired some time ago from WindStar. We going forward will be a more focused, better managed, and we hope a more easily understood enterprise.

Our third strategic goal was to streamline our core businesses. Liore Alroy, who runs our Telecom division and the management team successfully pared SG&A by 28.7% year over year to $53.2 million through targeted headcount reductions and company-wide pay and benefit cuts. Looking ahead, we expect to realize additional efficiencies in our Telecom division through a variety of initiatives. For example, we have recently completed a planned migration to an IP based network infrastructure in the United States from our legacy TDN switches. This conversion has led and will continue to lead to declines in such costs such as connectivity, facilities and equipment and software maintenance agreements.

Our fourth objective was to make strategic investments in a limited number of new ventures with substantial growth potential. And where appropriate to seek strategic partners to enhance our technical capabilities, reduce risk and enhance our access to capital. To that end, during the quarter we closed on the sale of a 50% interest in American Shale Oil subsidiary to Total, the fifth largest integrated oil and gas company in the world. We are working closely with Total's technical team as we develop the plans for our pilot tests out west in Colorado. On the site in Colorado, AMSO has begun our resource characterization work including the previously announced work with Schlumberger. That will enable us to better understand the geological and chemical characteristics of the leasehold as well as to establish hydrological baseline monitoring. We are also working on further process modeling and technology development.

Assuming all goes well, and contingent on the necessary permitting approvals, AMSO plans to begin our initial pilot test in calendar 2010. The results of that test will tell us a great deal about whether and under what conditions our in situ extraction process will be technically achievable. Commercial production is a minimum of five to seven years away. Commercial production is also contingent, of course, upon the resolution of significant technological, regulatory, economic, and permitting issues, as well as favorable market conditions.

Separately, we continue resource characterization activities in Israel where the Israeli Ministry of Infrastructure awarded an IDT subsidiary, Israeli Energy Initiatives, we call IEI, an exclusive license to explore for oil shale on 230 square kilometers in Israel's [Shafielda] basin. That's between Tel Aviv and the Dead Sea, fairly close to the Mediterranean Sea. As with the case for AMSO, our oil shale company in Colorado, we are talking to potential partners as we determine the appropriate path for exploring this opportunity in Israel.

By continuing to execute on all four components of the turnaround plan, we have fundamentally improved operational performance. Looking ahead, we will continue to evaluate our businesses and product lines, as well as the overall mix of businesses looking for additional efficiencies or other moves to further improve and focus our performance. The CTM spinoff is just one example of the type of strategic changes we continue to consider and explore. Our enthusiasm levels are at, I believe, an all-time high here at IDT. We are leaner, more focused, better positioned to weather the continuing challenges facing our businesses and those caused, of course, by the general state of the US and world economies. Corporate and divisional overhead has been right-sized and business unit management has the tools needed to accomplish their goals.

Our view of the Company's position is reflected in our continued buyback of IDT stock. During the third quarter we purchased an additional $1.4 million class-B and common shares, or over 5% of all outstanding shares for a bit more than $1.5 million. We'll continue to evaluate opportunities to purchase additional stock as our cash and working capital requirements permit.

Before Bill Pereira begins his analysis of our operational performance and financial situation, I want to take a moment to thank the IDT employees for their effort and sacrifice that they've made during the four quarters at least of this turnaround effort. Without their dedication and hard work, we would not have gotten to the place where we are today.

I'd like to introduce IDT's Chief Financial Officer, Bill Pereira. Bill?

Thank you, Jim. Before I delve into our financial results, I would like to take a moment to thank you, our shareholders, for your continued support of IDT. And I am particularly thankful to those of you that have reached out to us during the quarter with questions, comments, and ideas. We appreciate your interest, and more importantly, your feedback.

Now to our financial results. I continue to be encouraged by the progress we are making operationally in our turnaround effort. Despite the challenging economic environment we all face presently, IDT's drive toward financial stability and sustained operational profitability continued on a steady course during the quarter. Adjusted EBITDA, one of our key measures of financial performance, was $14.7 million for the quarter. This does not include a $2.6 million gain on our sale of a 50% interest in AMSO to Total. This quarter marks the fourth consecutive quarter of positive adjusted EBITDA for the Company, which I believe reaffirms the validity and sustainability of our turnaround plan.

Fiscal year to date, we have recorded adjusted EBITDA of $39.6 million. This represents an improvement of $118 million over the same nine-month period last fiscal year when we realized adjusted EBITDA losses of $78.3 million. What is particularly pleasing to me is that this improvement of $118 million in adjusted EBITDA year over year is based on contributions from every significant segment of the Company. For instance, IDT Telecom generated an additional $18 million in adjusted EBITDA toward its nine-month, year-over-year improvement in performance. IDT Energy is up $36 million over last year. Corporate costs have been aggressively reduced by $35 million over the same nine months one year ago. The remaining $29 million in adjusted EBITDA improvement comes from IDT Capital where we have either divested many of the businesses that were operating at a loss or have successfully secured partners to share in the investment of the businesses we decided to keep.

Because the operational improvements are widely distributed across the whole company and not relying on a single outperformer, I believe we're in a stronger position to sustain our progress going forward. The substantial improvements in performance are obviously reflecting positively in our cash flow and liquidity. Operating cash flow for the quarter was negative $3.9 million. However, if we were to exclude the $25 million we paid to the IRS during the quarter, operating cash flow was actually positive $21.1 million. This is the second consecutive quarter of positive operating cash flow excluding legacy payments to the IRS.

Let me just take a quick moment here to update you on where we stand regarding our original $115 million tax obligation to the IRS resulting from their audit of our fiscal years 2001 through 2004. Including the $25 million paid during Q3 and another $5 million paid to date since the close of Q3, we have now remitted to the IRS in total $110 million. We expect to extinguish our remaining liability to the IRS on June 16 with a payment of approximately $7 million to $8 million.

As for liquidity, cash, cash equivalents, and marketable securities increased to $201.3 million at the end of the quarter from $192.8 million at the close of Q2, primarily as a result of the improvement in operating cash flow I just mentioned, as well as the proceeds from the sale of IDT Carmel which we received in February. The quarter-over-quarter increase in our cash position during the period in which we lowered our obligation to the IRS by another $25 million has helped to improve our net working capital. Our working capital defined as current assets minus current liabilities improved by $5.6 million during the quarter.

While our adjusted EBITDA, cash flow, and liquidity all indicate that we are making considerable progress, our net income for Q3 still reflected a loss of $63.4 million. The majority this loss resulted from noncash items including impairment to goodwill totaling $59.8 million, depreciation and amortization of $11.9 million, and a $2.3 million writedown in the value of our real estate. The net loss also included $3 million in costs incurred shutting down IDT Carmel. We do not expect further significant losses related to the shutdown of IDT Carmel in Q4 or beyond.

As far as the intangible assets on our balance sheet, meaning goodwill and licenses, these were valued at a combined $83.9 million at the beginning of the fiscal year. They have now been reduced to $14.5 million as of April 30 as a result of the impairments I previously mentioned. While additional impairment tests of our intangible assets are ongoing and we expect to complete them by the close of the fiscal year, the current relatively low carrying value of these assets ensures that the magnitude of any future writedowns, to the extent there are any, will be significantly less than what we saw this quarter.

Through April 30, the Company has completed most of the restructuring steps envisioned under our turnaround plan. Restructuring charges in the first half of fiscal 2009 totaled $8.4 million, but only $600,000 during the third quarter. In summary, we believe the efforts to improve our operational performance and to clean up our balance sheet, which resulted in significant net losses in the first three fiscal quarters of fiscal 2009 are now mostly behind us. Our bottom line results should reflect greater financial stability as we head towards fiscal 2010.

Having said that, several unresolved issues remain, and investors should recognize them when evaluating IDT's financial conditions. In particular, as we recently reported T-Mobile filed a complaint against IDT in May 2009 alleging that IDT domestic telecom breached a wholesale supply agreement with T-Mobile to purchase at least $75 million in services from them by April 2009. T-Mobile claims that IDT domestic telecom purchased only approximately $31 million of services under the agreement. T-Mobile is seeking monetary damages for breach of contract including but not limited to the alleged $44 million shortfall balance, plus interest. We feel very strongly about our position and intend to conduct a vigorous legal defense.

An IDT subsidiary owns our current headquarters building at 520 Broad Street in Newark. The mortgage on the property is $26.1 million. We are in the process of moving our headquarters offices to rental space in a building nearby and plan to complete the move by July 31. We are presently in negotiations with our mortgage holder, and depending on the outcome of those negotiations and what we ultimately decide to do with the building, its carrying value may be impacted.

Now let's take a look at the Q3 performance of our business units starting with IDT Telecom. Revenues at IDT Telecom declined to $312.2 million in Q3 2009, down 13.6% year over year and 6.1% sequentially. The revenue decline in our Telecom Platform Services segment, 12.5% year over year and 5.9% over Q2 2009, reflects both lower minute volume as well as declines in average revenue per minute. Our Consumer Phone Services business, which we refer to as CPS, has been in harvest mode since 2006 and continued to experience customer attrition during Q3, though at slightly lower than anticipated rates. CPS revenue declined to $12.6 million in the quarter, down 33.7% from the same period a year ago, and down 11.1% sequentially.

Gross margin percentage for IDT Telecom was 21.3% in the third quarter compared to 21.9% in Q3 2008 and 21.5% in Q2. The gross margin for Telecom Platform Services improved to 19.9% during the quarter, up from 19.3% in the year-ago quarter, and 19.5% in Q2, 2009, as a result of ongoing reductions to network and activity costs and lower average termination costs per minute which more than compensated for the reduction in average revenue per minute. Gross margin for Consumer Phone Services was 53.2% in the third quarter compared to 67.7% in Q3 2008. However, CPS's gross margin a year ago was elevated by a reversal of certain connectivity accruals as a result of a positive settlement of a billing dispute, and this quarter's gross margin was in line with our expectations.

SG&A expenses for IDT Telecom declined 28.7% to $53.2 million in Q3 '09 compared to the year-ago period primarily as a result of lower compensation and employee benefit costs resulting from previously announced headcount, salary, and benefit reductions. SG&A expenses were relatively flat on a sequential basis, declining by less than $1 million versus Q2. Despite the aggressive reduction in SG&A achieved thus far at IDT Telecom, we continue to focus in this area, and believe the trend will be for SG&A to continue to decline. Adjusted EBITDA at IDT Telecom jumped to $10 million in Q3 2009 compared to a loss of $900,000 in the same period a year ago, primarily as a result of aggressive reductions in SG&A spending and network connectivity costs. Adjusted EBITDA declined by 32.6% quarter over quarter from $14.8 million in Q2, 2009, mostly due to the decline in sequential revenues which historically are lower in Q3 versus Q2 due both to the holiday sales season which occurs in fiscal Q2, and also due to the fact that Q3 has three less days than Q2, as well as due to the continued softness in consumer spending.

IDT Telecom's loss from operations for the quarter was $29.4 million, resulting mainly from restructuring and impairment charges of $29.3 million, nearly all of which was derived from the writeoff of goodwill in our rechargeable US calling card business. In Q3, 2008, IDT Telecom reported a comparable loss of $27.2 million of which $12 million resulted from restructuring-related charges. In Q2, 2009, the comparable loss was $700,000, which included $4.7 million in restructuring-related charges.

At IDT Energy, our energy supply company operating in New York state, we reported another excellent quarter. Revenues for the quarter were $66.7 million, virtually unchanged compared to the same period a year ago, but down 29% from Q2, 2009. Year over year, the revenues generated by our large customer base and slightly higher per-meter consumption were almost totally offset by declining prices. The sequential revenue decline was due to declining market prices for both electricity and gas, as well as anticipated seasonally driven lower gas consumption as weather temperatures began to increase.

Q3 is a perfect example of why revenue is not a key financial metric for us when evaluating the energy business. The revenue is largely driven by factors outside of our control, mainly, the weather and the commodity price. We can only control customer growth, and on that front IDT Energy continued to do well. The number of meters as of April 30, 2009, was approximately 414,000, a 20.9% year over year increase. The pace of sequential customer growth slowed to 6.1% during Q3 2009, compared to 16.2% last quarter. Churn during the quarter averaged 4.5% per month, substantially unchanged compared to the same period a year ago and for the previous quarter.

Declining commodity prices were also largely responsible for the reduction in direct costs, $46.9 million in Q3, down 21.7% compared to the same period a year ago, even though, again, we had a larger customer base with larger aggregate consumption in Q3 of this year. Direct costs were also down 34% compared to the previous quarter as a result of both less consumption and declining commodity costs. The gross margin percentage tripled from 9.7% in the third quarter a year ago to 29.7% in Q3, 2009, and was also up from 24.3% in the second quarter of fiscal year 2009 as costs from our commodity suppliers declined at a faster rate than the prices we charged our customers. In a market environment with declining commodity prices, as we saw this past quarter and for most of this fiscal year, an energy company like ours that buys its commodity in the spot market, benefits greatly from widening margins. However, when commodity prices begin to rise, as current market conditions seem to indicate gross margins will constrict.

SG&A rose to $6.9 million in Q3 2009, a 29.5% year-over-year increase, and a 19.2% quarter-over-quarter hike. SG&A costs were driven primarily by higher variable fees charged by the utilities, as well as by Keyspan's conversion to New York State's purchase of receivables program. These increases were offset somewhat by lower sales commission costs reflecting the slower pace of customer acquisitions.

Adjusted EBITDA jumped to $12.8 million in Q3 2009 from $900,000 in Q3 2008. Unusually favorable market conditions and customer lease acquisition growth contributed to the year-over-year increase. On our last call, we expressed the belief that the $16.5 million in adjusted EBITDA attained in Q2 '09 was unsustainable, and we were right. Adjusted EBITDA declined 22% quarter over quarter. As I mentioned, this expected reduction was largely due to seasonality as the demand for gas weakened as the weather temperature increased.

IDT Energy currently operates only in New York state. We certainly would like to build on this business. Energy's management is encouraged by positive steps recently adopted by regulatory agencies and utilities in several other states to deregulate energy markets and is presently working on various options for geographic expansion.

Now moving on to IDT Capital. IDT Capital reported revenues of $10.1 million in Q3, 2009 compared to $13.1 million in Q3 2008 and $10.9 million last quarter. The year-over-year revenue decline is primarily a result of the absence of revenues from businesses that were shut down or otherwise divested. On an adjusted EBITDA basis, IDT Capital lost $2.3 million in Q3 2009, a substantial improvement over both the $15.1 million loss during the third quarter of 2008 and the $4.1 million loss in Q2 2009. The biggest positive impact on IDT Capital's adjusted EBITDA both sequentially and year over year came from our alternative energy group which is comprised of AMSO which manages our oil shale joint venture with Total in western Colorado and IEI, our oil shale venture in Israel.

Following our sale of a 50% interest in AMSO to Total, beginning in March, we no longer consolidate AMSO. Instead, we now account for our ownership interest in AMSO using the equity method, since we have the ability to exercise significant influence over its operating and financial matters but we no longer control AMSO. Consequently our R&D expenditures for AMSO no longer get consolidated and reflected within our adjusted EBITDA results. Also, as a result of the equity method, our share of AMSO's loss is now reported within other income or expense in our statement of operations. In addition, during Q3, we recorded a $2.6 million gain on the sale of AMSO to Total, net of approximately $700,000 in legal fees. This gain is reported within income from operations.

IDT Capital recorded impairment charges of $33.1 million in Q3, primarily to write off goodwill of CTM Media and our WMET radio station as well as to write down $2.3 million in real estate assets. As a result of these impairments, IDT Capital reported an operating loss of $34.3 million for the third quarter of 2009, compared to an operating loss of $17.7 million in the comparable period last year and a loss of $17.1 million in the prior quarter of which $11.1 million was due to restructuring and impairment charges.

Finally, just to touch upon our work at the corporate level, SG&A costs for Q3 2009 were $5.8 million. That's a substantial improvement versus a $23.4 million recorded during the same three-month period a year ago even when taking into consideration that last year's Q3 had a one-time accrual of $10.5 million for a pre-tax litigation charge. Q3 SG&A also reflected a small improvement compared to the $6 million in SG&A recorded last quarter.

In summary, I believe the company has continued to make great strides in improving its operations, liquidity, and balance sheet even in the face of a very challenging economic environment. And we are not done. We continue to work diligently, pursuing ideas and initiatives that we hope will build on the progress we have made thus far. I look forward to sharing the results of those initiatives with you on future calls.

This concludes our earnings call. For those of you who joined late and missed the beginning portion of Jim's remarks, we will not be conducting a Q&A session as customary following our prepared remarks. Instead we ask you to please email us your questions at invest@corp.idt.net. To the extent that we can constructively answer your questions, they will be posted on our web site and filed with a Form 8-K as early as this Friday, June 12, following the market close. Meanwhile, enjoy your summer. And we look forward to updating you on our progress early in the fall. Good evening.

This concludes the teleconference. You may disconnect. Thank you for your participation.