Immersion Corp (IMMR) 2005 Q2 法說會逐字稿

Good afternoon. My name is Felicia and I will be your conference facilitator. At this time I would like to welcome everyone to the quarterly results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question and answer period. If you would like to ask a question during this time, simply press star and then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. Mr Viegas, you may begin your conference.

Thank you, Felicia. Good afternoon, ladies and gentlemen. I am pleased to welcome you to this discussion of Immersion's results for the second quarter of 2005. With me today is Stephen Ambler, Immersion's CFO and Vice President of Finance. By now you may have seen this quarter's earnings release that was distributed following the close of market today. If you have not, it is available on our website at www.immersion .com. A replay of this call will be available until August 15, 2005 by dialing 800-642-1687 and entering confirmation number 2696099. The replay will also be archived and available on our website for one year.

During the course of our comments today, we will be making forward looking statements. These forward looking statements reflect management's current forecast of certain aspects of the Company's future business. Forward looking statements are based on current information that is, by its nature, dynamic and subject to rapid and even abrupt changes. Our forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected or implied in our statements. Factors that could cause actual results or developments to differ include risk factors listed in today's news release, in the Company's SEC filings and in our annual report to shareholders, as well as any factors mentioned during our discussions today. As I have discussed in previous conference calls this year, our main focus is to achieve revenue growth that leads Immersion to an operating profit. This requires a careful balance of four areas.

First, the ongoing execution of sales and marketing plans in our established businesses to increase revenue. Second, selected investment in product and technology development for longer term new growth areas. Third, control over operating expenses. And fourth, the protection and defense of Immersion's extensive intellectual property portfolio across all of our businesses. It is worth noting again that my goal is to lead Immersion to profitability through increased product sales and licensing revenue regardless of the eventual outcome of our litigation with Sony. During today's call, I will be discussing five major highlights of the second quarter. The first, overall, Immersion revenue grew 13 % in the second quarter of 2005 over the second quarter of last year, while operating expenses decreased by 19%. Second highlight is that our medical product revenues grew 53% over the second quarter of last year.

The third highlight is with new licensees on board and the strong product sales of current licensees, gaming revenue increased 55% over the comparable quarter of last year. Fouth, we signed license agreements with the number one operator in Korea, SK Telecom and the number two handset maker in Korea, SK Teletech . And the fifth highlight is in the Sony case. Judge Wilkin denied Sony's April post judgment motions and Sony has filed their notice of appeal. I would now like to give you a high level financial summary, an update on our businesses and the status of our litigation with Sony. Our 2005 second quarter revenue was $6.2 million. We incurred a net loss of $2.8 million, a 42% reduction compared to the comparable quarter a year ago. Litigation expenses were $600,000 in the second quarter of 2005 which were down from $2 million in the second quarter of 2004.

We finished the quarter with $29.4 million in cash, up from 26.9 million on March 31, 2005. Revenue for the medical business was $2.5 million in the second quarter, an increase of 6% over the second quarter of 2004. In the past several conference calls, I have discussed our medical business strategy of focusing on selling training simulator products to hospitals and teaching institutions versus obtaining new development contracts. In addition, we are focusing on selling products to large corporate accounts such as medical device companies. The execution of this strategy has resulted in a steady increase in medical product sales. This quarter 53% growth over the second quarter of 2004. Since the last conference call, we released an upgraded phlebotomy software module for our CathSim AccuTouch system and an upgraded upper GI module for the Endoscopy AccuTouch System.

In May, at a worldwide cardiology conference and exhibition in Paris, France, Euro PCR, we exhibited a beta version of the new software module for carotid artery stenting and an enhanced module for coronary interventions for our Endovascular training simulator. Turning now to our gaming business, this quarter's revenue was $1.8 million, an increase of 55% over last year's second quarter revenue. This growth continues to be driven by licensing royalties from increased sales of console gaming peripherals by our licensees, including recently signed licensees. Immersion continues to benefit from the underling market growth of wireless game pads and steering wheels as well as from an increase in market share by our licensees. In the industrial business, revenue in the second quarter of this year was essentially flat compared to the same quarter last year. In the automotive market, we are focusing on applications for our haptic rotary, touch screen, and touch surface technologies. In May we formally announced our tactile touch screen technology at the Society of Information Display symposium.

This technology supplies tactile cues that's are absent in current touch screens. We believe these cues provide a more intuitive personal and natural experience for users because instead of just feeling the hard, unresponsive touch screen surface, you perceive that buttons to press and release just as with physical buttons and switches. By the end of June we completed and started selling a tactile touch monitor with software for demonstration purposes. OEM's and integrators in the automotive industry, as well as in point of sale, kiosk, industrial control, casino gaming and other markets can use the touch monitor and demo software to test and obtain feedback from their customers. Also in June we announced that Methode Electronics , Inc., a leading automotive industry supplier, licensed a broad range of our touch sense technology to develop products such as rotary controls and tactile touch screens for automotive OEM's, tier one suppliers and also non-automotive customers in markets such as industrial controls, exercise equipment, marine and aerospace.

Under the agreement, Methode receives a license to use Immersion's patented development tools, as well as technology transfer and non-recurring engineering services. Methode is a global manufacturer of components and subsystems with revenue over $390 million in their 2005 fiscal year. In the automotive market, they supply OEM's and tier one suppliers with devices that control the switching of electrical power and signals. A special emphasis of Methode's is to integrate components into efficiently packaged assemblies, such as steering wheel or steering column controls. While we will still continue to work directly with automotive OEM's to develop advanced concepts and generate demand, they can now also source our haptic technology in products produced by Methode in addition to Alps Electric. In our mobility business we are focus on three major markets. The U.S., Korea and Europe. In the past few months we reached several major milestones in Korea, which is an important trend setter and technology innovator in the mobility market.

In May we announced the license agreement with the number one operator in Korea, SK Telecom, which has over 18 million subscribers. The license allows SK Telecom to develop the infrastructure necessary for content developers to use our VibeTonz System to create touch sensations for games, ring tones and other downloadable content. Mobile games in Korea currently account for 14% of global mobile game sales. SK Telecom has announced plans to make a substantial investment in mobile gaming, including release of approximately 70 games in the second half of 2005, pouring more than 10 billion Korean won, or approximately $10 million, into a new 3-D game service. We are in the process of supporting SK Telecom's content developers as they add VibeTonz affects to enliven mobile games for the rapidly growing Korean mobile game market. Just as emerging technology has played a significant role in PC and console gaming, we anticipate it will have a significant impact on mobile gaming as well.

SK Telecom is currently offering the VibeTonz enabled Samsung SCH-G100 mobile phone to its subscribers. To give you an example of how mobile game play can influence the industry, the design of this new advanced entertainment phone allows phone use in portrait mode and game play in landscape mode. The phone has mixed graphics capability that displays both 2-D and 3-D images simultaneously, as well as a large high resolution color display, 1.3 mega pixel camera and stereo speakers. Currently three VibeTonz enabled games, Dangerous Racing, Metalion Reloaded and Shot Mobile Golf School are available for the G-100 phone through the after-market content system operated by Samsung. Earlier this week we announced the license agreement for the VibeTonz System with handset maker SK Teletech.

With the recent acquisition of a controlling interest in SK Teletech by Pantech&Curitel Communications, Inc, the combined company would rank as the number two handset maker for the domestic Korean market for the first half of 2005, ahead of LG Electronics and following the number one ranked Samsung Electronics. Pantech&Curitel markets mobile phones in over 50 countries in the world, giving the combined company a broader market reach and the potential for increased global market share. Immersion now counts as its licensees the number one and number two handset makers for the Korean market, Samsung and SK Teletech. As well as the number one wireless operator in Korea, SK Telecom. I want to briefly mention the positive press reviews published on VibeTonz enabled phones and downloadable content that were launched beginning in April.

Articles in PC Magazine, the New York Times and GameSpot, in particular, are evidence that the industry is beginning to realize the value that haptics can add to games, ring tones and the mobile phone user interface. Links to these articles are posted on the Immersion website. We're very encouraged by our success in Korea and the mobile team continues to drive hard into this important market. We are also focus on continuing efforts to further penetrate the U.S. market and to launch our first complete ecosystem of an operator, handset maker and content developers in Europe. We are investing in the mobility market opportunity and view it as one of the next growth catalysts for Immersion. Now let me update you on events relating to the Sony litigation.

We announced on September 21, 2004, that after trial the jury returned a verdict favorable to Immersion in our patent infringement suit against Sony Computer Entertainment Inc. and Sony Computer Entertainment of America, Inc. Both referred to here as Sony. The jury found that Sony enfringed all the asserted claims, 16 in total, of two Immersion patents and that those claims were valid. The jury also awarded Immersion damages in the amount of $82 million on sales of infringing consoles, controllers and games for the period of August of 2001 through June of 2004. On March 24, 2005, the court entered judgment in Immersion's favor and awarded Immersion the $82 million in past damages, plus prejudgment interest in the amount of $8.7 million for a total of $90.7 million. Immersion was also awarded its court costs as is customary in these cases. Court costs do not include attorneys fees.

Additionally, the court issued a permanent injunction against the manufacturer, used, sale, or import into the United States of the infringing Sony Playstation System consisting of the Playstation console, dual shot controllers, and the 47 games found by the jury to infringe Immersion's patents. The court stayed the permanent injunction pending appeal to the United States Court of Appeals for the Federal Circuit. The court further ordered Sony to pay a compulsory license fee at the rate of 1.37% for the duration of the stay of the permanent injunction. The 1.37% compulsory license rate is equivalent to the ratio of the damages awarded by the jury to the sales of infringing consoles, controllers and games presented at trial. Sony appealed the compulsory license orders to the United States Court of Appeals for the Federal Circuit. Sony's appeal of the interim orders has been consolidated with its appeal of the judgment.

In May of 2005 Sony filed request for inter-parties re-examination of the 333 and 213 patents with the United States Patent and Trademark Office. On July 6, 2005, Immersion filed a petition to dismiss, stay or alternatively suspend both of the requests for re-examination based at least on the grounds that a final judgment has already been entered by a United States District Court and that the Patent Office's current inner parties re-examination procedures denied due process of law. Sony filed its opposition to the partition on July 29, 2005. And we filed a short reply on August 5th. On June 16, 2005 Sony filed a notice of appeal from the District Court judgment to the United States Court of Appeals for the Federal Circuit. Sony's opening brief is currently due August 22, 2005. Additionally, on July 21, 2005 Sony filed a motion in the District Court before Judge Wilkin, seeking relief from the final judgment under rule 60b of the federal rules of civil procedure.

The grounds include alleged newly discovered evidence of purported prior art attributable to Mr. Craig Thorner which Sony contends Immersion concealed and withheld. Mr. Thorner is a named inventor on three patents that Sony urged as a basis for patent invalidity during the trial. Immersion's response to this motion is due on August -- excuse me, on October 12, 2005. While I cannot make any statements at this time about the falsity of his allegations that I concealed and withheld his purported prior art, I can say that I take my duty of candor very seriously. We will be responding in detail to the allegations in the context of the lawsuit. Immersion disputes and intends to vigorously defend itself against all of these allegations.

In a matter related to the Sony lawsuit, on March 24, 2005, the court entered an order dismissing certain of the claims brought by Internet Services LLC against Immersion with prejudice and certain claims without prejudice. Internet Services LLC has filed a notice of appeal of these orders with the United States Court of Appeals for the Federal Circuit. And ISLLC's appeal has been consolidated with Sony's appeal. In another related matter, Immersion filed a lawsuit on September 24, 2004 in the U.S. District Court for the Northern District of California against Electro Source, LLC which sells and distributes video game controllers under the Pelican name. The court rescheduled the trial date to October 10, 2006. The parties are in the process of conducting discovery. I'd now like to turn the call over to Stephen to cover a number of topics including a review of our financial performance for the quarter. Stephen?

Thanks, Vic. As stated in today's earnings release, revenues for the second quarter of 2005 were $6.2 million, compared to $5.5 million in the second quarter of 2004, an increase of 13%. Revenues for the quarter were Immersion's highest of any quarter, except for two prior fourth quarters, since the Company went public in 1999. The revenue results of each of our businesses in the second quarter of 2005 were as follows -- Medical business revenues were $2.5 million, equivalent to 40% of total revenues, versus $2.4 million in the comparable quarter in 2004. 90% of medical revenues were for product sales compared to 62% in the comparable quarter, reflecting the change of emphasis within our medical operation away from development contract business towards product sales. Gaming business revenues were $1.8 million, equivalent to 29% of total revenues versus $1.2 million in the comparable quarter of 2004.

Gaming revenues grew 55% over the second quarter of last year, driven by increased royalty and licensing revenues on console, gaming peripheral products and royalties from recently signed licensees. MadKats[ph] and Logitech represented 13% and 11% respectively of overall Company revenues for the quarter. Industrial business revenues were $1.9 million in both the second quarters of 2005 and 2004. The automotive part of this business, comprising mostly royalty revenue, was just under $600,000 for the quarter, a 71% increase over the comparable quarter of 2004. Offsetting this increase were lower revenues from our 3-D products, where sales were soft for the second consecutive quarter. Mobility business revenues were limited in Q2 2005. We signed agreements with SK Teletech and SK Telecom in the quarter.

We do not anticipate that mobility revenues will provide a significant contribution until 2006 at the earliest. Analyzing our second quarter revenue by category, product sales accounted for 52% of total revenue at $3.3 million compared to 52% of total revenue or $2.9 million in the second quarter a year ago. Royalties from patent and technology licensing represented 37% of total revenues or $2.3 million as compared to 35% of total revenues or $1.9 million for the comparable period a year ago. Development contract revenue for the quarter represented 11% of total revenues, or $660,000, compared to 13% of total revenue or $735,000 in the second quarter of 2004. For the quarter, our gross margins were $4.6 million, equivalent to 73%. In the comparable period of 2004, our gross margins were 72%. That's in line with expectations and consistent with comparable quarter based on the mix of revenues.

Second quarter 2005 operating expenses were $7.2 million compared to $8.9 million in the comparable quarter of 2004, a decrease of 19%. Included within operating expenses were approximately $600,000 of litigation costs compared to $2 million of litigation costs in a comparable period a year ago. Although litigation costs have dropped significantly from a year ago, they remain a significant expense and we anticipate that that will continue until such time as the Sony and related litigation is concluded. Net loss was $2.8 million or $0.12 per share, compared to a net loss of $4.8 million or $0.21 a share for the comparable quarter of 2004. As of June 30, 2005 we had 24.1 million shares of common stock outstanding. Also on June 30, 2005, we had cash and cash equivalents of $29.4 million compared to $26.9 million as of March 31, 2005 and $25.5 million at December 31, 2004. There was no change in the period related to our long-term convertible debt which is due in December, 2009.

During the quarter we received approximately $3.7 million from Sony pursuant to the Court's order for a compulsory license. This relates to the period January 1, 2005 through March 31, 2005. This sum has been accounted for as a long-term deferred revenue. I would like to remind you that effective January 1, 2006 the Company will have to account for stock-based compensation as an expense under FASB 123R. Our pro forma expense for the second quarter of 2005 was $1.4 million. At June 30, 2005 we had 131 employees compared to 128 at March 31, 2005. We are pleased to note that Thomas Weisel Partners initiated analyst coverage on Immersion on July 25, 2005. We hope that this will enhance investor interest and understanding in the Company. We are also active in investor relations.

We attended and presented at the Thomas Weisel Partners Growth Forum in San Francisco on June 15, 2005. And we will be attending and presenting at the Value Rich Financial Expo in New York on September the 14th and 15th and at the AeA Classic Financial conference in San Diego on November the 8th and 9th, 2005. We hope to see you at one or more of these conferences. This concludes my review of the financial results and other matters and I'll hand the call back to Vic.

Thanks, Stephen. In closing, I want to reiterate that my goal is to generate the revenue growth that will lead Immersion to profitability. We are carefully investing in our growth opportunities and are making significant progress in executing our business strategy. We are continuing our efforts to prevail in the Sony litigation and remain confident in our position in the anticipated appeals process. Felicia, please open the call for questions.

At this time, I would like to remind everyone, if you would like to ask a question, press star and then the number one on your telephone keypad. We'll pause for a moment to compile the Q&A roster. Your first question comes from the line of Kevin Hunt with Thomas Weisel Partners.

I had a couple of questions. First on the gaming revenue, can you -- you mentioned there was a couple of factors driving that, one of them being new licensees and the other being market share gains by your current customers. Can you maybe breakdown what, you know, the two -- how big the two factors are and what was relatively the bigger driver of the big growth you had there? And then secondly on the industrial business, can you talk about like the -- the automotive business, obviously, is ramping up pretty nicely. Can you maybe give us any kind of outlook for the other part of the business that's kind of been softer lately? Do you think that can kind of return to growth going forward?

Sure, okay, Kevin. Firstly on the gaming side, it is a combination of some of the new licensees that we entered into earlier this year. Those licensees are now selling those products. We are collecting royalty reports and payments from them. In terms of the weighted percentage of the growth and how much of it comes from new licensees versus the existing business. I don't really have that kind of a breakout for you. I can say that typically in the later stages of the console life cycle, this would be the Playstation from Sony and the X-box from Microsoft, both have announced new platforms that they will be introducing later this year and early next year. So as you get into the later life cycle of a platform, typically the third party controller providers will sell -- the higher percentage of their products would come later in its life cycle.

We're benefiting from aged platform where consumers are purchasing new controllers from third parties. So it is a mix of those two key activities. But the actual split, I don't really know the numbers. On the industrial side, as you mentioned, the automotive obviously continues to perform well. We believe we have created quite a bit of momentum there and feel pretty confident about the rest of the year and into 2006. The one area in the industrial business that has been weak. It was significantly below our expectation for the quarter and, in fact, were lower than Q2 of last year, was the 3-D product line. And this is a higher priced product line sold to industrial customers and research centric organizations more in the virtual reality space. We recently have increased the sales force in this 3-D area by adding three new headcount.

We've also upgraded our MicroScribe product line. And we have also added 19 new resellers of these products in order to grow the business. So we're aware of the softness and we are monitoring the situation as closely as possible. We believe we will recover this short fall and that later in '05 and then into '06, we believe that we will recover and get back to our normal run rate in the 3-D space.

Later, you said later this year?

Yes, we believe Q3, Q4 we should rebound and have better quarters for the 3-D product line.

And sorry, one last question on the expense side. So, you know, you mentioned Sony obviously has filed some additional, you know, appeals here. So can you maybe give us a better sense of the expenses related to the legal settlement? Is this 600,000 for this quarter kind of a good rate and maybe you are thinking about going forward, at least for the next couple of quarters, or should that go back up or any kind of help you could give us on that?

It is a very fluid situation. We have a number of litigation situations that are running in parallel. So we have quite an active legal team involved in these areas. We have the appeals process to deal with. We have the inner party's re-exam with the PTO. We have the most recent motion from Sony. So I would expect that given the level of activity, and I would anticipate the same kind of activity from Sony going forward, that we're probably at a level that should be relatively stable in the 0.5 million to 1 million a quarter range. But it''s awfully difficult to predict,. It just depends on timing and also on activities that are taken by Sony.

Okay. Thanks.

Sure, you're welcome. Thank you, Kevin.

Your next question comes from the line of Benjamin Montgomery, private investor.

Hi, I have a couple of questions as well. The first one is can you give us a number for what the total long-term deferred revenue stands at currently?

Yes. Total long-term deferred revenue is at $15.9 million.

And then secondly, Vic, I know during your prepared remarks you said that you really couldn't comment specifically about the issues pertaining to the Sony's claim for the 60-b issue. But are there any specific land mines that's investors need to be concerned about with regard to Thorner and his claims of prior art?

Well, I believe Sony is made in their motion of 60-b, they filed declarations, statements by Mr. Thorner as well as other individuals. So I believe they have made their case fairly clear. We, as I said before, we deny these allegations and we're going to defend ourselves vigorously, but to try to guess as to where they are going with this or the issues that will be raised by Sony or Mr. Thorner are difficult for us to predict right now. But we do deny these allegations.

Great. And then finally, with regard to the expiration of the sublicense disagreement with Microsoft, did that actually turn into any business for Immersion and/or Microsoft, that sublicensing capability?

Microsoft, as you correctly stated, they had a game platform sublicense. This was a very narrow set of rights that they had an ability to grant. Those expired in July of this year. And we do not believe that they granted any of those rights under that sublicense. So we believe that sublicense is now expired.

Okay, great. Well thank you very much.

Thanks, Benjamin.

Your next question comes from Kurt Meyer from Lehman Brothers.

Hi, Vic. I'm sorry. I was able to get on the call a little bit tardy and maybe you already resolved this or answered it, but I was just wondering if you could give us any kind of feedback that -- what's going on in the Korean market with Samsung selling those two phones over there. Quite simply, how is it going?

Well, we're very excited about the progress that we're making. I did mention that we signed our first operator agreement with SK Telecom, which is the largest Korean operator. They are now deploying the infrastructure to bring their content developers up to speed and create the content for the gaming cell phones that they are launching in that marketplace. We also signed the number two OEM, SK Teletech. Obviously the fact that Korea is a trend setting marketplace for us shows their interest in Vibe enabled capabilities. And we have got a lot of interest. A lot of people excited about what we have to offer.

In fact, I think the number two carrier is a company called KTF in Korea. And they were recently quoted as saying that there are not enough game phones models available to adequately promote the mobile gaming business. They are excited about the revenue potential. They're investing heavily in the mobile gaming space. And they would like to see an increase in mobile game phones. So we think that the addition of SK Teletech will help that condition and get more models out into the marketplace. So we're very optimistic. We are seeing great things from the mobility market.

Has Samsung given you any specific numbers as far as here is how many phones we have sold and the expiration is x and we've sold either above or below that number?

They have given us information relative to their manufacturing, the quantities that they produced, the quantities that they have shipped. I'm not sure we have accurate numbers on the sell through, but the anecdotal kind of evidence that we have is that they are very satisfied with the phones. In fact, we believe that the N-330, which was launched here in the United States, we believe that that phone will be picked up by at least one or more operators around the world. So we know that they're promoting and others are interested in carrying their phone lines. So we believe that -- we believe that the information that we're receiving is that they are very pleased with the results of the phones.

As I'm driving down the freeway right now listening to you on that N-330, does that imply that Samsung is coming back to you and saying we now want two or three or four more models? Have they given you any kind of sense or feedback that way?

Actually, the beauty of our model here is that you can take the same phone and that phone without any additional work on our part, Immersion's part, that phone can be marketed through other operators anywhere that runs on a CDMA system. So we do believe that that model can be marketed to other -- in other areas and there is minimal involvement from Immersion or even Samsung.

And I'm going to go down an alleyway that's kind of in (inaudible) for just a second, but I remember reading something about you're hiring of a mediator who seems to be, if I'm not mistaken, a retired judge of some pretty high caliber, to talk about court costs. And it seemed to this -- and I'm not very knowledgeable about the court system here, but it seemed kind of strange to hire that type of an individual just to mediate court costs. Is there anything else that is going on with that mediator or is it strictly related to court costs?

Let me give just a little bit of a background. In the court ruling, the court ruled in our favor and awarded us court costs. We submitted to the court a -- an itemized list of $800,000 of court costs which we believe should be reimbursable. The court clerk who has the authority to decide the reimbursable court costs awarded Immersion approximately $500,000 in costs. Sony is arguing that the amount should be closer to 100,000. So based on this dispute, the judge ordered the parties, Sony and Immersion, to select someone to arbitrate the matter. We both agreed on an individual and that is Judge Lynch. In terms of what his role is, it is to arbitrate this dispute in court costs.

Okay. Thanks a lot, I appreciate it.

You're welcome. Thanks, Kurt.

At this time, there are no further questions. We do have another question from Danny Violith, private investor.

Hi, Vic, how are you doing?

Fine, thanks.

I have got two quick questions for you. The first one is, do you expect to sign any cell phone carrier in Europe in the next six to eight months?

Well, I don't know about the time frame, but I can say that our engineers have ported our technology over to the GSM platform. We talked, I believe, previously about GSM phones, which is the dominant system in Europe. So I can happily tell you that our engineers have made that happen and we're confident that the VibeTonz Technology is ready for the GSM market. Selecting a carrier, OEM supplier, and all the specifics, timing and so on, we are not in control of that. But our technology is available -- would be available for the GSM market.

My second question, and I'm not really sure if you want to comment on that, it seems like you guys missed a deadline to ask the judge to lift a stay of injunction. Any specific reason for that, because it seems like Sony is playing hardball with you guys? They are not cutting you any kind of break.

We did not miss the deadline. That was a conscious decision on our part.

I see. Okay, well thank you so much.

Okay, Danny.

At this time there are no further questions.

Okay, well, well, thank you very much. Thank you for your participation in today's call. We appreciate your continued interest. Thank you and good afternoon.

This concludes today's quarterly results conference call. You may now disconnect.