Identiv Inc (INVE) 2012 Q4 法說會逐字稿

Welcome to the Q4 2012 Identive Group Earnings Conference Call.

My name is Dawn, and I will be the operator for today's call.

At this time, all participants are in a listen-only mode.

Later, we will conduct a question and answer session.

Please note that this conference is being recorded.

I will now turn the call over to Darby Dye.

Ms. Dye, you may begin.

Hello, everyone, and thank you for joining us today.

The purpose of today's conference call is to supplement the information provided in our press release issued earlier today, announcing the company's financial results for the fourth quarter and year ended December 31, 2012.

Speaking on today's call are Ayman Ashour, Chairman and CEO; and David Wear, CFO.

Before we begin, I would like to remind you that various remarks we make on this call, including those about our projected future financial results, economic and market trends, and our competitive position, constitute forward-looking statements.

These forward-looking statements and all other statements made on this call that are not historical facts are subject to a number of risks and uncertainties that may cause actual results to differ materially.

The forward-looking statements we make today speak as of today, and we do not undertake any obligation to update any such statements to reflect events or circumstances occurring after today.

Please refer to the press release from today, our Annual Report on Form 10-K for the year ended December 31, 2011, and subsequent SEC filings for a description of factors that could cause forward-looking statements to differ materially from actual results.

During this conference call, we will also be making reference to non-GAAP results or projections including non-GAAP gross margin, operating expenses, adjusted EBITDA and earnings per share.

Identive uses these non-GAAP measures internally and believes that they provide a meaningful way for investors to evaluate and compare our operating performance from period-to-period, but cautions investors to consider these measures in addition to, not as a substitute for, nor superior to Identive's consolidated financial results as presented in accordance with GAAP.

Each of the non-GAAP measures we discuss excludes various items, and a complete reconciliation between GAAP and non-GAAP financial measures is included in today's press release, which is available in the Investor Relations section of Identive's website.

As a reminder, today's call is also available as a webcast with slides, which can be accessed from the Presentations, Reports, and Webcasts page within the Investor Relations section of our website at www.identive-group.com.

If you are viewing the webcast, you may enlarge the size of this presentation by clicking on the magnifying lens in the bottom right-hand corner of your screen.

I would now like to introduce Ayman Ashour.

Thank you, Darby, and thanks to all of you for joining us today.

Good morning.

We experienced a strengthening revenue trend in Q4, which was increased order flow and improved traction across many parts of our business, particularly the ID Products segment.

The structuring program we put in place back in June had a strong impact on Q4, and our OpEx declined 22% compared to Q4 of last year.

This enabled us to return to profitability on an adjusted EBITDA basis.

Importantly, we -- the level of adjusted EBITDA we achieved has much improved by $1.4 million sequentially and $1 million year-on-year.

Approximately $350,000 of that EBITDA is attributable to earlier quarters.

Looking at our main business categories, we saw improvement in the market for our ID infrastructure products globally, and it was good to see Europe showing some recovery.

This market has been impacted by austerity programs in many countries, so this was an encouraging development for us.

We also had strong sales of our Smart Card readers and chipsets in the Asia Pacific region for a variety of eGovernment, employee ID, and other applications.

The transponder projects that were delayed for much of the year, restarted in a vigorous way in Q4, and we achieved significant new wins as well during the quarter.

This was a record quarter for NFC in particular, and RFID projects in general, with a substantial amount of high-volume orders in Q4 applications including the tag-in-the-box applications for telcos event, transit ticketing, ski ticketing, and most importantly, the emerging market of Machine-to-Machine or M2M applications, such as electronic games and other medical applications as well.

Many of the new orders that we received in Q4 are for the supply of NFC and RFID products through Q2 and beyond.

In our ID Solutions business, we had improved performance from the educational market in Switzerland and with our cashless payment business, or Cashless Betalen, in The Netherlands.

Identity management and cloud solutions, sales of our access control systems to the US government remained stable, and we also won new contracts at the state level, with important new wins for courthouses in Kentucky, some 300 courthouses.

Overall, the Identity Management and Solutions segment, while improved, was weaker with some push outs.

This impacted our mix as our ID Products were nearly 50% of the total.

Normally, our mix of ID Products is about 40% to 45%, systems and solutions 55% to 60%, this time it was exactly 50%-50%.

Moving on to the business review.

Looking now at the business and market activities in Q4, recovery in the EMEA region, in general, was important for us.

The robust recovery in transponder orders was fueled in large part by record NFC shipment.

Nearly 15 million pieces were shipped in Q4, with many of these aimed at the M2M applications.

Cashless Betalen in Holland continued to expand in Q4 and since, in terms of growth, both consumer or customer base of -- to more than 200,000 users, as well as development in new canteen and retail payment environments, including an implementation at the NXP headquarters in Holland.

We had some important new wins at state government level, like I mentioned, and we estimate the US Federal Government business for the quarter to have been at about $5.6 million, so relatively stable.

We had expected a stronger quarter, particularly in the physical access side, where implementation somewhat lags.

Overall, for the US Government business, it was within our expectation, and I will talk more about the US Government sector later on when I discuss the outlook.

A very positive aspect of Q4 was our declining OpEx, which was in line with the restructuring actions we initiated in June, and which is helping us to reset our expense run rate to a lower breakeven point.

David will provide more color on this in a few moments.

A couple of challenges for us moving forward.

The cycle of customer education, pilots, and trial and finally, conversion to enterprise development for our SaaS-based identity management systems continue to be long.

We continue to have important wins, but the technology and the market is still emergent, and is taking us a long time to convert the initial wins and trials into substantial volume orders.

The selections remain very important and really important milestones for us to be selected by some of the top tech companies and top partners around the world, but it is taking long to actually turn that into revenue.

Another bit of a challenge for us is on the transponder manufacturing side.

We've had to move from 60-some percent capacity utilization for the first 3 quarters into being 100% full, and we continue to operate at full capacity right now.

So we're looking at opportunities to expand our capacity cost-effectively and juggling to meet strong customer needs at the moment.

I would like now to hand over to David Wear, our CFO, who will take you through our financial results for Q4, and then I'll wrap up with some strategy comments and our outlook.

Over to you, David.

Thank you, Ayman.

So now moving to Slide 8, I'll take you through our results in a little more detail.

At $26.6 million, Q4 revenue was 16% higher than in Q3, with strong ID Product sales in transponders and Smart Card readers, as Ayman discussed.

Removing the impact of the large German eID program from 2011, revenue in the quarter was flat when compared with the prior year.

Non-GAAP gross profit margin declined by 5 percentage points sequentially, as our sales in the quarter had an unusually higher mix of product revenue versus higher margin systems in third [ph].

Margin was also slightly down year-over-year for similar reasons.

However, improvement was made year-over-year in the ID Products segment's margins.

At $9.7 million, non-GAAP operating expenses were 9% lower than in the previous quarter and down 17% from the same quarter a year ago.

The quarter benefited from an adjustment to research and development expense arising from the capitalization of $0.5 million of development costs associated with our Software-as-a-Service offering.

Removing this benefit, operating expenses declined by 14% and 15%, respectively.

Reflecting our commitment to development -- developing Software-as-a-Service applications, we will continue to capitalize software development expense where it is consistent with GAAP.

The restructuring program we initiated in June has been largely completed, following the consolidation of support functions in Germany and in the USA.

Overall, cost reductions in 2012 were approximately $6 million when compared with the first quarter operating expense levels.

Cost savings associated with the 2012 restructuring are now expected to be approximately $7 million on an annualized basis.

No restructuring expenses reported in the period, and training costs associated with the termination of 2 executives continue to be expensed and recorded in our GAAP operating expenses.

These are removed in our non-GAAP comparisons.

The lower operating expenses boosted our EBITDA performance in the quarter and helped to offset the lower margin percentage arising from the change of sales mix.

Dependent upon the quarter sales mix, our breakeven point for adjusted EBITDA is between $23 million and $24 million in revenue, which is significantly lower than it was a year ago at $27 million to $28 million per quarter.

GAAP gross profit percentage declined 3 percentage points quarter-on-quarter and 2 percentage points year-over-year as a result of the different sales mix commented on above.

Looking at our GAAP operating expenses and adjusting for the impairment expenses in the third quarter, these are also lower, both quarter-on-quarter and year-on-year, reflecting the restructuring savings previously commented on.

This measure also includes amortization, depreciation and equity-based compensation, which accounts for the higher absolute values reported.

For this reason, the non-GAAP measures remain a more appropriate reflection of the underlying cash operating expense.

Moving to Slide 9 and looking below the adjusted EBITDA line, the significant amount of impairment charges taken earlier in the year reduce the amount of noncash amortization expense against the earnings each quarter.

This is reflected in the downward trajectory of the depreciation and amortization line.

As required, we conducted our annual impairment review during the fourth quarter, and it was determined no further adjustments were necessary to the valuation of intangible and goodwill for our reporting units.

The impairment of goodwill charge in the quarter relates to a change in the originally recorded goodwill of one of our reporting units, as a result of a reclassification of their pension plan.

We also recorded a pension expense of $289,000 in Q4 related to these plans, and we will now be reassessing their value annually and recording any adjustments in the fourth quarter of the year.

We also recorded a one-time deferred tax benefit in the quarter of $1.4 million, following the annual review of our tax charge.

In addition, we recorded a $0.7 million benefit from the re-measurement of the Hirsch-related party [ph] liability, and post-acquisition reorganization costs of $0.3 million are consistent with the prior quarters.

Other items excluded from adjusted EBITDA are consistent with the past quarters.

Looking at the balance sheet, we ended 2012 with $7.4 million in cash.

This was in line with expectations.

Significant investment was made in working capital.

Accounts receivables at $17.3 million are high, and good progress has been made in the past 2 months to reduce these to more normal levels.

However, as our activity expands in the coming year, we do anticipate higher receivables at the quarter end.

Inventory declined by nearly $1.9 million, reflecting better procurement practices.

Property and equipment increase reflects investment in the fourth quarter in our transponder manufacturing capacity in Singapore.

We are now seeing significant benefit from this investment, and as Ayman mentioned, we are currently operating at full capacity.

Also reflected is the capitalization of software development expense.

Accounts payable reduced by $2.4 million in the quarter, including settlement of amounts owed to stadium caterers in our Payment Solution operation.

The reduction in the deferred tax liability reflects the deferred tax benefit associated with the impairment expense reported previously.

And lastly, the increase in other current liabilities and long-term obligations principally reflects the new borrowings from Hercules Technologies, received at the end of October and repayable from May 2013 onwards, being $2 million and $5.5 million, respectively.

Turning to Slide 11, we ended the quarter with cash, cash equivalents, and restricted cash of $7.4 million, which is a decrease of $0.9 million on the previous quarter.

This also includes the net $6.9 million received from Hercules Technologies at the end of October.

The principal use of cash in the quarter were working capital expansion of $3.6 million.

This has been commented on previously.

We also invested in the capacity of Singapore, and the total capital expenditure in the period was $1.6 million.

Further significant use of cash included the repayment of the Wells Fargo credit line of $1.8 million, as well as $0.8 million related to interest and debt service.

Turn to Slide 12, this graph highlights the progress we continue to make in reducing our operating expenses in both absolute and percentage terms.

The restructuring and discretionary spend freeze we actioned in Q2 marks the start of a pronounced reduction in operating expenses.

With that, I'll turn the call back to Ayman.

Thank you, David.

I would now like to discuss some items pertaining to Q1 2013 and the general outlook.

First, I will talk about government business in general, and here, I'd like to remind you that we primarily work with the US government on security-related projects; almost 100% focused on government employees and contractors.

We do similar work with some other world governments around the world as part of our employee ID business.

Now when we talk about eGovernment, these tend to be typically citizen ID systems that allow citizens or residents to interact with government services and the like.

Virtually, all of our eGovernment work is outside of the US as the various electronic ID -- citizen ID programs lag in the US.

You would recall things like, Real ID Act, et cetera, are being stalled in Congress over the years.

Citizen ID was the area where we saw sharp drop in Europe, particularly Germany, last year.

Western Europe remains weak in the citizen ID area, but we are gaining business in new countries and markets such as the United Arab Emirates, Eastern Europe, Latin America and Asia Pacific.

So we expect this area to be better in 2013, and we are no longer reliant on large contracts from Western Europe as we were.

And this, our expectation for an improved outlook in 2013, is based on our visibility of projects and projects we already won such as DOE [ph], for example.

A new opportunity that has opened for us is a new mandate for the Criminal Justice Information Systems, or CJIS, where the new mandate requires a higher level of security for law enforcement personnel to access criminal justice information.

So they will essentially be requiring a 2-factor authentication.

Typically, that problem is solved with a smart card or a smart card-like device and a card reader and the software associated with it.

So that actually creates a new opportunity for us, and the mandate that stands now requires hundreds of thousands of law enforcement personnel around the US to comply with this mandate by October, or thereabout, of this year.

Lastly, and this is a major issue, I would like to discuss the Federal Government business.

Most people are aware that President Obama signed the sequestration order forcing budget cuts, and are also aware of the potential for further budget problems at the end of this month.

The majority of the government programs we support are mandated national and/or homeland security-type programs.

Many of the projects we're in are part of multiyear programs, which gives us the confidence that the projects in which we're involved will continue over the coming months and years, and make us relatively comfortable to expect a similar level of business to what we've enjoyed from the Federal Government over the last few years, which has ranged between $19 million at the low end to about $23 million at the high end.

These figures represent our best estimate for what we supply to the Federal Government, either directly or through multiple channels, be it distribution, OEMs or high-level integrator or integrator partners.

We expect, for the year, that our Federal Government business in total will be, again, in the region of $20 million to $22 million.

But we think we may see slippage and have already seen some projects slip in both January and February, so there's a level of short-term timing risk here.

Moving on to the areas of our focused growth, and particularly the mega trends, if you will.

We had seen strong order flow in our NFC business.

An interesting development is the adoption of NFC, and Machine-to-Machine application is now leading the charge.

This is happening in many markets from electronic games, with game pieces having embedded NFC in them, to medical applications where devices are connected through Bluetooth after pairing is accomplished with NFC.

We have launched a number of specific products targeting this market, that's the Machine-to-Machine market, and special kits to enable developers to move quickly to adopting NFC without them having to be NFC or RFID experts.

You would have seen our GameChangeR launch a couple of months ago or thereabout.

Now our Tagtrail platform is being well-received, and this is the area -- this is our secure cloud-based NFC services platform, which we initially showcased in San Francisco in last summer, and launched the final version in Q4.

So the Tagtrail is being very well received.

I would encourage you to download the app on your Android device.

Even if you don't have NFC, you will be able to download it.

The app is Tagtrail or check out tagtrail.com to see the -- what an application owner would be doing and how they would be deploying tags and managing them.

Last week, we had successful deployments at the Mobile World Congress in Barcelona.

This is the largest mobile show in the world, and we worked with several marquee brands to power their marketing communication.

Before the end of Q1, so this month, we expect Tagtrail to be on direct-to-consumer trials with large telcos in multiple major countries on a national basis.

One of the important features of Tagtrail, and this is really part of the process we learned between the launch in the summer and the final launch in Q4, is that we needed to address people who do not have NFC on their phones yet.

So that's why we ensured that the Tagtrail user would get a very high-level, a very good user experience with a bar code application.

So you don't have to have an NFC on your phone to be able to use Tagtrail, so it is fully compatible with bar code, as well as NFC.

This allowed us and allows our partners to build the user base over the years, as the NFC adoption in smartphones grows further.

Another important innovation for us was SmartCore technology, which we launched last year.

And we've -- in fact, you will see a blog of mine about it approximately 15 months ago where I detailed more about the technology, but it is primarily aiming at the growing market of contactless cards, where we are aiming to replace older, Secure ID technology with the new secure technology for governments, enterprise, transport, ski applications, et cetera.

And the main thing about SmartCore is that it uses an innovative card core manufacturing technology that allows the card manufacturers to use their existing machine to make much better cards that are thinner, that are much more durable.

We have 25 design wins and have already ordered and scheduled shipments for about 9.5 million card cores over the course of Q1 and Q2 of this year.

We believe SmartCore is a significant growth opportunity for Identive.

SmartCore, which is a patent-pending technology, something we spent several years working on, and it is wonderful to actually see the uptick in it right now.

We announced today an important new win for us in the payment world.

We will be using our payment software and analytics, the very same systems that we used in stadia and festivals, with a franchise food retailer across Europe, where we will be basically offering integration of in-store point-of-sale terminals into our cloud-based payment engines.

This project gives us an important new exposure in this market, which offers important growth opportunities and a recurring revenue base.

Our -- the franchise currently has about 300 locations in 4 or 5 different countries.

Also in payment, working with Rabobank, our partners in Holland with our Cashless Betalen, we have now reached over 200,000 users.

Several of these users were converted after the London Olympics, where they were using our tomPAY tags during hospitality events in London, and when they went back to Holland, they converted into Cashless Betalen users.

So the Cashless Betalen acceptance in Holland is expanding, and that is -- we expect that expansion to continue also in this quarter and through the years.

On the product side for payment, we're continuing to expand our product offering with new solutions for payment applications such as tomPAY, which we use in the Olympics and is being used in many other applications now, as well as readers and other products.

Now I'm going to move on to the guidance for Q1 and 2013.

The normal seasonality for us makes Q1 a poor quarter, and this increases our dependence on the US Government business.

The disruption and delays caused by sequestering pose additional risk to us.

So we offer guidance for Q1 in the range of $22 million to $24 million in revenues, with some caveats based on the level of US Government business, which still, as of now, in March, remains uncertain.

Some of the uncertainty is primarily time and could trigger some liquidity issues like those we had earlier in the year or earlier last year.

For the full year, we see several parts of our business strong and expect we would finish the year with significant growth over 2012, with sales in the region of $105 million to $115 million and EBITDA in the $4 million to $6 million.

With that, I'll turn the call over to Darby to deal with Q&A, and thank you.

(Operator Instructions).

Our first question comes from Bryan Prohm from Cowen and Company.

Ayman, give me a little more detail.

I'm curious to understand that our -- the risk to the top line guidance here in 1Q with respect to where the US government sales may or may not come in.

Is that -- is the worst case scenario the downside to $22 million in revenue and best case scenario all in, there's may be upside to $24 million or is there -- is it more nuanced than that?

I wasn't quite sure that I got that right.

Sure.

Thank you, Bryan.

I think the -- it is tough to sort of peg it exactly, but based on where we're looking right now, it is -- the $22 million to $24 million is where we think it is, but there is significant risk still.

Our normal expectation for Q1 would be that the US Federal Government business would be about $5 million, and we can probably, sort of looking at the sequestering being sort of a 13% across-the-board, then you can say, "okay, there's probably 10% risk."

But we had slips in January and February, particularly in February, directly related to sequestering.

And so it is -- so it could be -- I mean, it will never be 0 because we've already done some government business, but it could be that the range, if it goes down as low as $3 million, it will probably be that we've missed the $22 million, end up at $21 million.

That's really unlikely.

So I wanted to give you a realistic range and address the risk rather than give you a very broad range.

So our best guess is $22 million to $24 million, but there is risk to that -- heightened risk to that just because of the situation.

And just really, because the government is usually about $5 million a quarter for us, and as you know, the government tends to be probably the most profitable segment for us because it's part of employee ID.

So the corresponding hit to EBITDA is meaningful.

So when you look at the earlier -- the other quarters, it is not as hard.

But with Q1, it becomes more meaningful, so I just wanted to heighten that, because I didn't want to -- we've done a -- we didn't do a good job last year when we had the Q1 and then surprised you with stuff in the 10-K.

So I just really wanted to highlight that, so you guys are not caught by surprise.

Okay.

Thanks for that.

I mean -- well it sounds like there's still risk to the downside, but I'll move on to the next question about NFC and NFC penetration opportunities, our new opportunities.

I'm intrigued by M2M because it's obviously an area of significant growth opportunity for multiple different businesses in wireless and wireless technology.

So tell me a little bit about the M2M opportunities that you see and whether or not that can play out meaningfully here in the near term.

Thanks.

Sure, sure.

With this particular question, I'll talk in generic terms, and I hope you appreciate that we are under strict confidentiality for that type of work we're doing with our clients, so I don't -- I obviously do not want to risk any of that.

But if you basically just Google NFC electronic games, you will see a lot of activity in that area, and it's generally based on the giving the various devices personality.

And that allows them, sort of the various game pieces, personality and that allows -- it just makes the -- NFC is all about connecting the cyber world with the physical world or the physical point with an Internet.

So taking that into an electronic game environment just makes it so much more fun for a user or for somebody playing the game.

And that's why it is an exciting personality.

We've -- and we're seeing that users in experimental, and in some games that have been launched, just absolutely love it.

The other big M2M application that we've seen and we're seeing is more and more about Bluetooth and WiFi pairing.

So you know how Bluetooth can be a little bit of -- it's not terribly intuitive to -- even if you take a new headset that you buy for your phone and you're doing the pairing, or a phone with a car audio system, you have to enter the 4 digits, and you have to do this, and you have to do that.

With NFC, you can basically just touch the device and the pairing is done.

So it takes away a barrier.

It makes it so much more intuitive.

So we're seeing many applications in that nature.

We have done some already in the medical field, and we're seeing more and more projects of that.

I hope that gives you a bit more color on it, Bryan.

No, that's great.

And real quickly to just conclude on NFC.

Can you give us a little more update on how business is tracking at the major handset OEMs with respect to NFC?

I know that obviously, you're going to be stronger in markets where Windows, phone, and Blackberry are stronger, but I'm, I guess, more interested in Android, especially Android in the lower end.

How many Android OEMs actually currently Identive customers or potential Identive customers here in the near term beyond Samsung, or any of the other (inaudible).

Sure.

Yes.

With -- in terms of the tag-in-the-box type applications, the big user we've had has been Nokia.

We've had other users, other telcos like Orange, different other telcos around the world that we've supplied, but it will be the telcos rather than the handset manufacturers.

And the -- we've done lots of tag-in-the-box applications, but I think most of the handset makers are now pushing the adoption issues much more into the telcos.

So we're spending time with the handset guys, but we're spending a lot more time with the telcos, and people who are really what we call campaign owners.

And the other thing is as you -- the Tagtrail, and I don't know Bryan if you had the chance to download it or not, but if you download the app and even if you don't have NFC, just -- it is so slick as an app with the bar code and the tracking functionality, et cetera.

And if you just also take a look at Tagtrail.com on the community pages, you'll get a feel for the sort of applications.

Now in terms of what other customers IdentiveNFC.com continues to generate.

It is really the who's who with the Fortune 50, the Fortune 100, the Global 1000, significant -- not significant in dollars, but a significant number of people ordering sort of 10 tags, 20 tags, 100 tags, 1,000 tags, SDKs, readers, et cetera.

So it continues to be sort of a portal that a lot of people developing NFC are coming to, and our position of terms of being offering the tag, the personalized tags, the social media tags, the readers, the SDKs, and being able to offer designs with Broadcom, as well as NXP, as well as Infineon, as well as FTN, other players and Sony and Google Places, et cetera, continues to make us sort of, we believe, the top place, the top portal for people actually doing things with NFC.

Great.

Thanks for taking all my questions, Ayman.

I will talk to you soon.

Thank you.

Our next question comes from Bhakti Pavani with C.K. Cooper & Company.

You talked about the transponder capacity.

You are running at a full capacity level.

What kind of time frame are you looking at increasing that capacity?

And what kind of impact that, do you think, would have on the cost?

I think right now we're sort of making do with juggling what we have and adding a little bit of capacity here and there.

We really -- we need to improve our liquidity and our capital position to be able to add more capacity.

So I cannot give you a specific answer right now on that particular question, Bhakti.

Okay.

Also you guys did a very good job on reducing the operating expenses.

Is that the similar range of OpEx do you think would continue in 2013, or is there some more room to reduce that further?

Any color on that?

Thank you, Bhakti.

That's a really good question.

I think the -- if you were to freeze the revenues at the Q4 levels, there's probably a little bit of further reduction from actions that we've already taken.

But as we're seeing growth in revenues and projecting growth in revenues, we would really sort of feel it's more appropriate to talk about sort of the OpEx as a percentage of sales or the percentage of revenue.

So we would expect that the OpEx, as a percentage of revenue, would remain roughly the same.

But in net terms, as the revenues expand, which we expect them to, that the OpEx would expand in net terms.

Sounds good.

Also what kind of capital expenditure we should assume going forward in 2013 and beyond?

What kind of levels?

I think right now we're not projecting major CapEx this year, so I think if you assume something in the range of $1 million or so for the year, that that would be a fair assumption.

As we address sort of capital needs, that would be obviously revised and would be updated, and we would come back to you at that point.

Okay.

Thank you very much.

That's it from my side.

Thank you.

Darby, back to you.

Thank you all for joining us today.

We look forward to providing you with further updates on our progress in the future and to speaking with you on our Q1 earnings call in a couple of months.

Have a good day.

Bye-bye.

Thank you.

Thank you, ladies and gentlemen.

This concludes today's conference.

Thank you for participating.

You may now disconnect.