Kopin Corp (KOPN) 2013 Q1 法說會逐字稿

Good morning and welcome to the Kopin Corporation's first-quarter of 2013 financial results conference call. Today's call is being recorded for Internet replay. You may access an archived version of the call on Kopin's website at www.kopin.com. With us today from the Company are Chairman and Chief Executive Officer, Dr. John C.C. Fan; and Chief Financial Officer, Mr. Richard Sneider.

Thank you, sir. Please go ahead.

Thank you, Operator. Welcome, everyone, and thank you for joining us this morning. John will begin today's call with a discussion of our strategy, technologies, and markets. And I will go through the fiscal first-quarter results at a high level, and John will conclude our prepared remarks and then we'll be happy to take your questions.

I would like to remind everyone that during today's call, taking place on Wednesday, May 8, 2013, that we're going to be making forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, and that these statements are based on the Company's current expectations, projections, beliefs, and estimates, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements.

Potential risks include, but are not limited to, demand for our voice- and gesture-controlled body-worn computing technology platform; operating results of our foreign subsidiaries, Forth Dimension Displays and Ikanos Consulting, Ltd.; market conditions and other factors discussed in our most recent annual report on Form 10-K and other documents that we file with the Securities and Exchange Commission. The Company undertakes no obligation to update these forward-looking statements made during today's call.

And with that, I'm going to turn it over to John.

Thank you, Rich. I would like to take just a few minutes to reconfirm Kopin's multi-year business strategy. The wearable computing wave is coming, and Kopin is uniquely positioned to ride this wave. Kopin has more than 20 years of IP -- intellectual property in the wearable computing area; and has been focused on making investments necessary to position ourselves as the leading provider of critical components and of licensed concept systems to its partners, who develop branded, wearable computing products.

Wearable computing is not just another product category. This coming wave represents a secular shift towards computers that are much more integrated to the way we work and live. The question Kopin investors should be asking are -- what is coming next? And which company is best positioned to be a leader in that new market?

We believe strongly the future is wearable computing. Advances in cloud computing, prodigious data and analytics, micro-displays, optics, and voice recognition technology almost dictate that computers will become more integrated into our daily lives. This is likely in less than 10 years, personal computers (technical difficulty) smartphones will be relics of the past.

As we -- as discussed on previous calls, in order to enter the wearable computing market, a company needs to develop competency in several key areas -- it needs great IP and technologies in software, speech enhancement, display, optics, chipsets, and ergonomics, and maybe a few more. We believe we have the strongest IP portfolio in the market to cover all these areas.

We filed the first patent in this area in 1993. And now we have more than 200 patents with, several new patents filed every month. In the past year, we have also formed a number of strategic partnerships that allow us to offer the highest quality and most comprehensive sets of solutions in these areas. Aside from these recent addition to our portfolio through strategic investment of our acquisitions; Ask Ziggy, for instance; Ikanos; our partnership with Olympus on optics; our partnership with Motorola with their HC1, which is based on Kopin's wearable computing platform.

We have recently announced three more strategic moves that are in line with or with our goal of being the preferred partnership partner in wearable computing. We have announced in the partnership with Edmund Scientific lenses to distribute the RUBY Module, which is an SVGA microdisplay, which is often in full-color or monochrome versions.

We also have acquired four patents in speech and enhancement and noise cancellation for Aurisound. And we have filed 14 our own patents during the quarter. And just this week, Kopin announced the acquisition of a majority share of e-MDT America [interest] Incorporated, the expert in low-power and analog digital circuit design. E-MDT America specializes in designing ultra low-power driver integrated circuits and backplanes for many kinds of displays, including reflective liquid crystal on silicon -- LCOS displays.

Our business model is transforming from a commodity business into a solutions-based and license-based business model, with higher gross margin potential and growth potential to mirror the larger companies such as Qualcomm. As we stated before, 2013 is an investment year to position Kopin to seize the wearable computing wave, which we expect to hit in early 2014.

We are very encouraged by the feedback we have received, and we expect to make a number of exciting announcements as the year progresses.

Well, with that, I will now turn the call to Richard for the quarter's financial results and guidance. Rich?

Thank you, John. Beginning with the top line, total revenues for the first quarter were $6.3 million compared with $10.9 million for the first quarter of 2012, primarily reflecting the expected decline in sales of our products from the military applications. Now, before we go into the operating expenses, it's important to remember that our expense structure is not tied to the currently quarter revenues or first fiscal year revenue projections, but to our longer-term goals.

Gross margin for the first quarter was 107% of product revenues compared with 69% in the first quarter of last year. The decrease reflects manufacturing inefficiencies resulting from the under-absorption of overhead due to the lower volume of sales. R&D expense in Q1 of 2013 was $4.2 million compared to $3 million for Q1 of 2012. The increase reflects an increase in cost to develop body-worn computing technologies.

SG&A expense increased from $4.2 million in the first quarter 2012 to $5.7 million in the first quarter this year. The increase for the first three months is primarily related to increases of approximately $500,000 for non-cash stock compensation. $300,000 relates to professional fees resulting from the sale of our III-V product line and investment in KTC; and an increase of about $200,000 of patent amortization.

Other income and expense includes a non-cash $2.5 million write-down of an equity investment; $220,000 of foreign currency gains; and a net $133,000 of interest income.

And now, this is going to get a little tricky, so hopefully you can follow this.

Under the discontinued operations, we recorded gains, net of tax, of approximately $20.2 million on the sale of our III-V product line and investment in KTC. Included within the gain is an estimated federal and state tax of approximately $13 million. Under generally accepted accounting principles, we showed the gain, net of tax, in the discontinued operations line. But since we have net operating loss carryforwards to offset the tax, we show the offsetting benefits in continuing operations, which is why we are showing a tax benefit in the tax provision line of $13 million.

Turning to the bottom line, with the completion of the sale of our III-V assets in the first quarter of this year, our net income for the fourth quarter was $21.6 million, or $0.34 a share; compared with a net loss of $2.6 million, or $0.04 per share, for the first quarter of 2012. Cash and equivalents and marketable securities, which includes consideration received from the sale of III-V assets, totaled $137.5 million at March 30, 2013, compared with $92.5 million at year-end. We continue to have no long-term debt.

We now have received a total of $55 million from the sale, and the remaining $15 million will be paid to us on the third anniversary of the closing. Capital expenditures for the quarter were approximately $0, and that reflects the fact that last year we made some significant investments in energy-saving equipment in the fab, and we actually received rebates from the energy company. So, when you see our cash flow when we file the Q tomorrow, you'll actually see negative numbers.

Depreciation and amortization was $1.1 million for Q1 of 2013. Stock compensation expense was $1.5 million for the first quarter, and was allocated as follows -- $1.4 million in SG&A; $54,000 of cost of product revenues; and $537,000 to R&D. Accounts receivable days outstanding at March 30, 2013, were 49 days, compared with 54 days at the end of the first quarter 2012.

On March 20, 2013, the Company announced its Board of Directors authorized a stock repurchase program of up to 30 million of the Company's common stock. We will commence the buyback on or about May 11. We could not start the buyback until we had an open window, which we deem to be two days after our Q1 2013 (technical difficulty) information was released. (technical difficulty)

Now for guidance. We continue to expect full-year revenues to be in the range of $18 million to $22 million. In light of the expectation that we will incur significant operating losses to advance our critical component and license concepts for wearable products, we expect a loss in the range of $19 million to $23 million in 2013, excluding the gain on the sales of III-V product line and the write-down of the investments.

We are updating the guidance due to additional costs as a result of the need to expedite the development of several displays to meet customers' timelines; costs incurred to assist Motorola in developing the HC1; and additional costs associated with e-MDT. We have provided estimated 2013 revenue and net loss ranges in order for investors to understand the impact of both the sale of our III-V product line and the expected changes in our remaining businesses in 2013 compared to 2012.

However, we believe that Kopin has a great opportunity to position itself in the growing wearable cloud computing market. With our strong financial position, our focus on 2013 is on developing technology and establishing relationships with partners, and not achieving any particular financial metric. Accordingly, our 2013 net losses may exceed our current estimates.

I will now turn it over to John.

Thank you, Rich. Consumer demand is growing for wearable computing products. And I want to show investors that Kopin is not standing still, waiting for the wave to hit. We are in active discussions with a number of leading technology companies who are looking to us to accelerate and enable their interest in the wearable computing market.

We are not in a position to make any announcements today. But I'm committed to inform you as quickly as we are able to. Our balance sheet is very, very strong, and debt free, as Rich told you. And as we transform to a solutions-based and license-based model, we anticipate we'll produce faster-growing, recurring revenue that will drive higher gross margins.

Kopin has been a thought leader for many years now. And we are developing the areas that will make wearable computing a reality. It's a combination of patents, partnerships, and people that Kopin brings to the table uniquely positioning us to ride this wave, which is clearly growing now. We look forward to ongoing discussion with you in the coming months on this exciting area.

And now, Operator, please open the line for questions.

(Operator Instructions). Matt Robison, Wunderlich Securities.

Good morning, gentlemen. John, can you talk a little bit about the consumer business? It looks like it was up sequentially in what we would normally consider to be a not very strong seasonal time period. And maybe give us a little flavor of how you think revenue might develop this year.

Well, consumer business right now is still primarily in the camera area. We have a new product for two customers, which we are now ramping up for. And those products -- so far, nobody in the market can make it. But this is still early, and this is a new model, so we don't know exactly how the growth ramp will be.

Now, of course, later on, if people do grow into wearable computing, some of them will be for consumers also.

Well, yes. In the context of the way you report, you put everything but military into the consumer bucket. So that would include Forth Dimension and everything else. So is there anything else aside from the camera business that develops in the quarter?

In consumer?

Well, the non-military.

Non-military. See, there are some early signs of wearable computing activities, but nothing to really separate them out yet.

And the R&D was all military? In terms of R&D?

Front-end R&D is all military so far, or primarily of -- actually, not the all; actually primarily all, but primarily military.

Okay. Rich, did you say depreciation and amortization was $1.2 million or $1.1 million?

Depreciation and amortization, $1.1 million.

And what was cash flow from operations?

I don't have that number. And the reason why is that, honestly, our accountants are still debating as to how to properly show the impact on the sale of the III-V business. Apparently, there's a large disparity in practice as to how that affects the cash flow, so I can't really quote you a number. That might actually be different than what the Q is going to say tomorrow.

Okay. How much was paid for e-MDT, and how many people did you get?

We don't disclose -- it did not reach the threshold for disclosure, so we don't talk about the size of it.

How about the staff?

I'd say it's about half a dozen systems designers.

Okay. And how should we look at the OpEx outlook?

That's going to be a fluid situation. And that's kind of why I made a couple of those remarks. The range is pretty significant, as to what it could be. And that's why for the -- we've just never given loss guidance, but that's why we did it. We think we can meet the loss. But as the various components are kind of difficult, honestly, to give guidance on.

Traditionally, we'd give you a percentage of the sales. But they're not really linked anymore. R&D isn't tied to the current sales. It's tied to what we think we are going to do in the next couple of years.

Yes. What are the kind of components, qualitatively, that could skew it one way or the other?

The SG&A should be somewhere in the range of last year. The big swing in SG&A is the non-stock compensation, because we have certain plans that are mark-to-marketed. And so, for instance, this quarter, SG&A was up $500,000 just because the stock price was up. So that's why it gets -- but excluding those types of things, SG&A should be pretty much in line with what it was last year.

And then, cost of sales is going to run somewhere between 75% and 100% of sales, is the best I can give you.

And why is -- and that's because of facilities not fully utilized, principally?

And the timing of military shipments.

So, basically, the cost is really a function of keeping the doors open for the military business.

Right. The sequestration and did throw some havoc into it; delayed some shipments this quarter. Our guys are telling me that it moved to the right and we're going to make it up this year. So that's why it's tough to -- and as you know, that's a big gross margin item for us. So that has a big swing from quarter to quarter on the percentages.

Yes, the variable margin, right. What's the variable margin like for the rest of the business?

Variable margin for the -- I don't think we (multiple speakers).

No, what I mean is -- when you look at the -- when you're not just trying to fill the fixed costs, and you're looking at this.

I don't think we ever break it out, Matt. But I think we can give you some general idea. For the wearable computer products, the margin is very good. For cameras, as you well know, it's a true high-volume commodity product. The margin is not as good. But the way we start solving it is going to products that nobody else can make.

Sure. Now, Rich, how should we look at taxes for the rest of the year?

Our net tax position will have alt-min. And I expect the total taxes for the year is going to net out to somewhere between $100,000 and $150,000 in the line.

Okay. Thanks, I'll yield the floor.

(Operator Instructions). Dan Weston, WestCap Management.

Yes, hi, good morning, guys. Thanks for taking the question. Just a few on the guidance you provided for fiscal year 2013. Could you let us know what you predict the actual cash loss guidance will be?

The cash loss, excluding acquisitions, we would expect depreciation to be about $4 million; and stock comp to be somewhere in the neighborhood of $3 million. As I mentioned, there is this swing -- some of it is mark-to-marketed. So you can back off about that amount from the net loss to get to an EBITDA, which would be an approximation of cash flow. We're expecting $2 million to $3 million of CapEx (technical difficulty).

Okay, thanks. And then also, in terms of the guidance on the revenue side, are you including any potential revenue coming from the wearable computing market -- or just the existing businesses you have business in now?

Just the existing businesses.

So, $0 revenue guidance from any wearable computing?

I wouldn't call it $0 because we have customers who are developing products, so we will sell them some displays and optics. We'll do some things from a component nature. But no real significant licensing revenue for instance; or for instance, there is nothing factored in for the Motorola products, which they expect to launch this year, but we just haven't factored anything into it. So, I wouldn't say nothing; but it's a de minimis amount.

Okay, fine. And then, Dr. Fan, you mentioned that you're turning the business more into a recurring revenue model. Could you just outline that for us, in terms of what you expect and how you expect that to develop into a recurring revenue model for you all?

Yes. Our business model now is twofold -- the first focus on would be wearable computing. We do sell critical components. Just to describe this, I can describe the Motorola model, which was announced; and we've talked about it several times. We license our concept model, which is Golden-i 3.5, to Motorola. They take our concept model and turn it into what's now called HC1, which they announced at their launch late last year. And I think they anticipate to start shipping this year.

In the process, we get license fees, which is recurring. We are also in the process -- they will buy the full critical component, buy the optical path. They will buy the whole optical engine. They also license our software. So these are recurring.

So, we are very much like a Qualcomm model, which we try to emulate, obviously -- is sell chipsets like Qualcomm did, and also license their standards and their IPs. So, we are building our IP portfolio, which was already very strong. We're still acquiring and finding a little more IPs. This is going to be a big area. The whole wearable computing is, I think, not just a small little category of one product. No, it's going to be all entire wave. So we position ourselves into IP, which as you well know, definitely is recurring.

And we're also positioning ourselves in critical areas such as display, I want to remind you. It's our optical engine. The optical engine means display. They have the optics and you have the chipsets that go with it. And then you put it all into a plastic -- or whatever container you want to put in, ship the engine. And what do we have for military. Now we're shipping to wearable computing. I hope I (multiple speakers).

Yes, that's good. I just have a couple of quick ones. In terms of the patent portfolio, you just mentioned the wearable computing segment. Could you refresh our memories in terms of how many patents you actually have issued in that specific area?

Issued area -- that's totally a shipping -- we have over 200 patents now. Counting is very difficult because we are buying patents of worth signing, just a lot quarter along with buying 14. The lawyers love us anyway right now. They basically live here. I think we have about 50% -- no; about 40% of them relate to display and display systems. And as you can understand, that's where our original situations are.

We have now software, a lot of software talent. We are now -- I'm very glad that we got the four patents for Aurisound. They are the most original patents in this whole area of speech. Those patents comes in Japan and United States, China; and they are all issued patents, so we're very glad to have that.

We are still building there -- in fact, last quarter alone, we found three speech patents. Speech is going to be a big thing for the wearable. If you don't have good sound, good speech, you can forget about wearable. So we are building that. And, later on, just stay tuned; we're going to have additional announcements in this area. We want to be the number-one speech than the entire world.

So that's on another area. And ergonomics, as we all well know, wearing something over your head is a huge issue. Now, of course, we have a lot of experience with the military, so we know what it does take and what does not take. And we already have patents in it, and we're going to find additional patents. Some of them are design patents. So I could just go on and on. We can talk about it. I'm very excited about this area.

It's not over yet. We're still just seeing the beginning part. I wouldn't even say the inflection point has been reached. The inflection point probably will be early next year that will reach, and then it becomes very clear. So, that's why we're very active in acquiring patents; acquiring companies and people. Because I think next year, those prices will be very different.

Very good. And, lastly, you are able to utilize a lot of those NOLs on your sale. Could you refresh us in terms of what the NOL number looks like right now, federal and state?

We don't have a significant amount of state NOL. We have some R&D credits and things like that. But for the federal standpoint, we have roughly $50 million. You'll notice that there is a -- you have to read our footnotes very carefully -- about half of that is associated with stock options. So we don't actually put those on the books, but they are there for us to use. So the actual number is around $50 million.

Very good. Guys, thanks very much for taking the questions, and good luck.

Jim Kennedy, Marathon Capital Management.

Hi, John. Hi, Rich. John, help me with the few things, okay? As you know, we've been here a while, and what I'm wrestling with is how I look at 2014. So, granted this is a building year, investment year, for you. What I'm struggling with is, how do we know we'd get to 2014 and we see any kind of substantial revenue? And, obviously, anything over $0 at this point on a percentage basis is substantial, but how do I find that out? We're sitting here at a $20 million run rate. You say you want to buy in stock. You're buying in stock at 10 times revenue. How do I know that 2014 comes about, and we're sitting here in the fourth quarter of 2014 saying, well, that was fun, but we derived $5 million worth of revenue and we burned another $15 million in cash.

Help me get my hands around the potential in 2014 -- and I'm not asking for guidance -- but you ought to be able to tell us about some of the potential applications. You don't have to talk about customers, but where those applications are in development; where we are in the adoption cycle; what gives you comfort or confidence that, in the first quarter or second quarter of 2014, that indeed we're going to start seeing what we have all been waiting for on the top line?

Yes. Jim, it's an excellent question. It's obviously the same question that we address to our Board and all. I think what you -- I have to answer your question in several different layers, different levels. First of all, the most important of all is that whether we or you or anybody outside believe wearable computing is coming. Of course they have quite a lot of studies coming out and it varies, the basic numbers.

Okay, John.

So I still have to go into those (multiple speakers).

John, let me just say, okay, I'm over that hump. Wearable computing is coming; it's going to be huge. What I'm asking for is, how do I know it's not going to be huge in 2020 as opposed to us seeing substantial growth in 2014 and 2015?

Okay. So, you're over the hump on wearable computing is coming, but you are not -- it sounds like you're not over the hump that wearable computing is coming soon. That's what I'm trying to outline. The wearable computing, we believe, is coming next year. So if you don't believe that -- so you think the world is about 2020, then you're right -- everything could be shifted to the right. And that is the most critical part, we believe, and I hope -- and I think many studies show us already -- and I don't need to quote all the studies now, that the number by 2016 -- 2016 is very large.

So, that's the most fundamental point. Jim, if you believe it may come in 2020, then you're right. Then everything will be shifted to the right. But we don't believe so. I hope our investors do not believe so. And many studies already say this is not going to be like that. The technology to make the wearable computing is here -- the dimension of cloud computing, the voice, the analytics, the optics, the display. All those are here. What they need to do is put it together with software.

You have to find a couple killer apps, just like the early days of PC. You find the killer apps in the word processing, in the spreadsheet; so, smartphones, same way. You find the killer app and, I tell you -- thank God to Google. They will find a killer app, and they are finding some of them. Of course there are people who are negative about it. Which one -- which new device comes out where they are not negative at about it? Look at the cell phone, for instance. People say it's going to be used in the desert.

John, John, let me ask it another way.

Now the question is, so -- but first I have to convince you they are coming. And it looks like you are agreed that it's coming. I want to try to convince you it's coming now, next year. Now, how do you discuss Kopin's performance? That is (multiple speakers).

So, John, it's --

(Inaudible) the metrics that we guided ourselves at.

Okay, if we exit 2014, calendar 2014, what's a disappointment for you from this space on the top line? Are you going to be disappointed if we have $3 million? Are you going to be disappointed if we have $10 million? Are you going to be disappointed if we have $25 million?

I answer your question. We do not necessarily judge by that. What we think is, we'll be disappointed if Google is successful, the Glass is very successful, and we are not one of the major leaders in this area. Okay, that would be a big disappointment. We'll be disappointed if Google Glass comes out and it was a bomb; didn't work; nobody wanted it. Nobody wanted it.

Okay. I thought that our -- I thought that one of our premises here was that the adoption of what we have developed really will occur on the commercial side, not the consumer side first. We've talked about hands-free in warehouses, hands-free in various occupations. Why is that market -- forget the consumer market -- why is that industrial market (multiple speakers) and the largest place, initially?

In the industrial market, we do a different matrix. We'll be disappointed if we do not sign up two or three more guys that are already developing products for public safety, for firemen, for medical, for warehousing. Okay, so for us -- you know that market. That market is a slow but extremely sticky market. It takes time. It's not way it's driven by revenue, it's driven by the big guys saying, I'm going to build a product for the firemen. The firemen will take years to get people, or install in firemen around the United States. But one thing in store, it says you, you're not going to judge by 2014. By the year 2014, you're lucky if the product is already certified. When do you think the municipal guys are going to buy?

But however, if you are the only guy selling to the new firemen, this is a big thing. So, I'm saying let's don't get ourselves in the narrow context of what's happening in 2013 first-quarter. It's really what happens -- how many guys you sign up. Do you get guys, like, for firemen? Are you the only guy? Or the military -- are you the only guy for the new military systems?

I don't want to put names, but I would say -- are those guys going to put ink in the system? Are the special ops all going to use this? Is anybody else in the market?

Okay, let me ask, in light of the most recent acquisition -- and you alluded to potentially more acquisitions going forward. What are we -- and maybe the right word is not, missing. But what is it that we're trying to fill in here that we need, and we do not have a complete solution at this point? Or that we aren't as vertically integrated as we want to be.

Yes, I think it's actually a very, very good question. I think we are -- of course, you know, we have been working on it for quite a few years, especially in the early days with the military area. If there's any weakness, I would say we're still weak in the software. Software is an area -- it's so big, and there's a lot of application software. Of course, we can get people to help you to write it. But in many areas we still need areas apps for small verticals; for instance, like firemen. You need apps for the firemen. And these apps are different. And there's no consumer apps out there, so you need to have partners. You need people to help special verticals for the people. Without the app, then the firemen cannot use the machine; the device we've built. So these are the type of things we are now continuing to look for, how to hurdle during the holes.

Okay, and in terms of the buyback, what's the logic there? Obviously, we have a lot of tackling and blocking to do here before we see substantial revenue. Why wouldn't we be shepherding our cash in the event that it would take longer than any of us think?

Well, Jim, it's an interesting question. And we have shareholders -- I'll be very honest with you -- we have shareholders who are astounded that we are not buying as much stock as we can by every day. Because they believe that, if for instance, just Google is successful, then the stock price will rise; and that they believe the market is huge, and we are very well-positioned; and that you have an opportunity to buy stock at a relatively low price vis-a-vis where people think it will be in three or four years.

And then, frankly, we have other investors that sound like yourself, who are like -- you're crazy to spend a dime on stock buybacks. And so the Board goes through its fiduciary responsibilities and evaluates the situation, and this is the decision they came up with. But I can tell you that I get calls all the time from both sides of the aisle on this issue.

Well, it's certainly reflective of us getting out of III-V and betting the house on everything. And a stock buyback further increases that bet. So that's my only comment there.

Last question, Rich, on the March 30 balance sheet under other assets, what is the additional $15 million? Was that all related to the acquisition? And what is that $15 million?

Right. That's the note receivable that will be due in three years as part of the acquisition.

Okay, so that's actually a note.

Yes. Well, technically, it's not a note. I have to be careful about that. But it is, in essence, a note.

Okay.

There's not a separate note agreement. It's within the original agreement. But technically -- it really is a note.

Got you. Okay. Thank you.

Matt Robison, Wunderlich Securities.

(Technical difficulty) clarification on one of the more boring topics, Rich. The alt minimum tax, you said $100,000 to $150,000. Is that net of the large gain you had in the first quarter? Or is that just kind of a quarterly rate we should look at?

No, that's supposing -- so what you're seeing there is a gross-up. You're seeing a $13 million benefit. And then, an equal and opposite amount is in discontinued ops line. So the two essentially net to $0. And there is roughly around -- I could get back to you -- it's like a $25,000 actual alt-min provision buried in there.

Okay. So, as far as what we should look at for the next three quarters, we should be thinking $25,000 kind of alt-min for the next few quarters. And if we wanted to come up with a more of a non-GAAP or adjusted EPS number, even for the first quarter, looking at continuing operations, we might think of it in those kind of terms as well, right?

That's exactly correct.

Thank you.

Thank you. I would like to turn the floor back over to management for any additional or closing comments.

Well, thank you, everyone, for joining us today. As a reminder, we have our annual meeting tomorrow at Bingham McCutchen, One Federal Street, Boston, at 9 a.m. And I hope to see you there. Now, even if you are not able to attend, please vote. Your vote is very important to us. You can still vote over the Internet. We look forward to speaking with you again in the near future. Thank you.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines at this time, and have a wonderful day.