LightPath Technologies Inc (LPTH) 2011 Q4 法說會逐字稿

Greetings, and welcome to the LightPath Technologies, Inc. fourth-quarter and year ended June 30, 2011 conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Dorothy Cipolla, CFO and Corporate Vice President for LightPath Technologies, Inc. Thank you, Ms. Cipolla. You may begin.

Thank you, and good afternoon. I would like to thank everyone for joining us today for LightPath Technologies' fiscal 2011 fourth-quarter financial results conference call. If anyone participating on the call this afternoon does not have a copy of the earnings release, you can find a copy on our website at LightPath.com. Or if you're unable to access this material online, you may call LightPath at 407-382-4003 and request a copy.

I would like to start by reviewing the Company's Safe Harbor statement. Statements in this conference call that are not descriptions of historical facts are forward-looking statements relating to future events. And, as such, all forward-looking statements are made pursuant to the Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties and actual results may differ materially. Forward-looking statements, when used in this call, can be defined by the words anticipate, could, enable, estimate, intend, expect, belief, potential, will, should, project, and similar expressions as they relate to LightPath Technologies. Investors are cautioned that all forward-looking statements involve risks and uncertainties which may cause actual results to differ from those anticipated by LightPath Technologies at this time. Factors that could cause or contribute to such differences include those risks fully described in LightPath Technologies' public filings with the US Securities and Exchange Commission, which can be viewed at SEC.gov.

It is now my pleasure to turn the call over to our CEO and President, Jim Gaynor.

Thank you, and good afternoon. I would also like to thank everyone for joining us today for LightPath Technologies' fiscal 2011 fourth-quarter and year-end financial results conference call.

For the fiscal year 2011, revenues grew 8% to $10 million. Backlog increased $929,000, up 31%, and gross margins remained healthy at 39%, albeit down from the previous year, as the cost of goods sold was impacted by the ramping up of production volume, competitive price pressures and product mix changes. We have identified the areas of cost increases and continue to work on cost reductions, productivity improvements, and to manage our costs closely. LightPath was able to grow its business in spite of uncertain market environment and a weak economy.

The work we have done during the year to strengthen our sales network and add new products as we execute our business plan is paying off, as shown in the revenue growth from our distribution and catalog channels, each up 18%. And solid gains in instrumentation, up 29%, and industrial markets, up 10%. Unit shipment volume continues to ramp up with a 44% increase in units shipped in the fiscal fourth quarter of 2011. And a 38% unit volume increase for the entire fiscal year of 2011.

LightPath is continuing to improve its overall performance and has reported a positive net income in the fourth quarter of fiscal 2011. Fiscal fourth quarter revenue grew to $2.8 million, up 14% over the previous quarter. And gross margin was 40% and our backlog of orders grew $240,000 quarter-to-quarter. EBITDA for the fiscal fourth quarter of 2011 was $281,000, indicating continued improved performance of the Company's core operations.

Despite all the economic uncertainty and high unemployment rate, the photonics industry remains an area of high growth. The July 2011 Photonics Market index, an index of 25 photonics companies, which includes LightPath, and published by OEM Capital, is up 12.1% year-to-date, and up 75% for the last 12 months, as compared to the S&P 500.

While we are cautious about the near term, we believe, as the fiscal 2011 results above indicate, that our business plan is working. We see continued growth opportunities for LightPath in the low-cost commercial markets and infrared markets that make us very optimistic and excited for our long-term business.

While we have seen gross margin erosion in 2011 from competitive price pressure and product mix changes, we do have plans in place to reduce our manufacturing costs and improve our gross margin contribution. These plans include the ability to leverage our unit volume increases to lower purchase costs of glass, improve our tool life, continued productivity improvements, and lowering our anti reflective coating costs. We expect our upward growth trend to continue and anticipate it will accelerate in fiscal 2012.

I would now like to turn the call over to Dorothy, our CFO, to discuss our financial results for the fiscal 2011 fourth quarter ended, and year ended, June 30, 2011 in greater detail.

Thank you, Jim. I'll first talk about the results for the 3 months ended June 30, our fiscal fourth quarter.

Revenue for the fourth quarter was $2.78 million compared to $2.81 million for the fourth quarter of last year, a decrease of 1%. The decrease from the fourth quarter of last year was primarily being attributable to mix, with lower sales volumes of isolators offset by higher sales in collimators.

Our precision-molded optic sales units were significantly higher as a result of our increased production capabilities, and our pursuit of high-volume, low-cost lens business. Growth in sales going forward is expected to be derived primarily from the precision-molded optics product line, our low-cost lenses being sold in Asia, and a number of new lens designs we have in development. Our gross margin percentage in the fourth quarter compared to the fourth quarter of last year decreased to 40% from 51%.

Total manufacturing costs of $1.7 million was approximately $253,000 higher in the fourth quarter compared to the same period last year. The manufacturing cost increase was due to higher wages, increased freight costs, and higher tooling expenses, primarily associated with increasing our production rate. Unit shipment volume in precision-molded optics was up 44% in the fourth quarter compared to the same period last year. The manufacturing cost increase was partially offset by a 22% improvement in productivity.

Fourth quarter total costs and expenses decreased $60,000 to $1.1 million compared to $1.2 million for the same period last year. SG&A expenses were $95,000 less at $842,000 in the fourth quarter compared to the fourth quarter last year. The primary cost reduction resulting from [$60,000 spent for] Investor Relations activities. This reduction was partially offset by increased spending of $39,000 on new product development, for a total of $258,249. The net result is a higher cost of goods sold and lower total cost expenses, and a net operating income of $22,000 for fourth quarter.

Interest expense was approximately $23,000 in the fourth quarter of fiscal 2011 as compared to $193,000 in the fourth quarter of last year. This decrease in interest expense resulted from the conversion of a majority of the outstanding convertible debentures into shares of our common stock. We also extended the maturity date of the convertible debentures to August 1, 2013. The convertible debentures issued on August 1, 2008 account for approximately $20,000 in interest during the quarter ended June 30, 2011. This includes periodic interest at 8% and amortization of the related debt issuance costs and debt discount.

Net income for the fourth quarter was $429, or $0.00 per basic and diluted common share compared with $92,000, or $0.01 per basic and diluted share for the same period last year. Weighted average basic shares outstanding increased to 9.7 million in the fourth quarter compared to 8.9 million in the fourth quarter last year, primarily due to the issuance of shares of common stock related to the conversion of debentures, which happened in fiscal 2010.

Now I would like to talk about the results for the year. Revenue for the fiscal year 2011 totaled $10 million compared to $9.3 million for last year, an increase of 8%. The increase from last year was primarily attributable to our higher sales volumes for precision-molded optics, collimators, and GRADIUM lenses. Our precision-molded optic sales units were significantly higher, but our average selling price was lower. This is the result of our pursuit of high-volume, low-cost lens business. Growth in sales going forward is expected to be derived primarily from the precision-molded optics product line, our low-cost lenses being sold in Asia and our new lens designs currently in development.

Our gross margin percentage in fiscal 2011 compared to fiscal 2010 decreased to 39% from 47%. Total manufacturing costs of $6.1 million was $1.1 million higher in fiscal 2011 compared to the prior year. This increase in cost of goods sold resulted from brief costs associated with ramping up production volumes, competitive price pressures, and product mix changes. We incurred increased labor costs of $225,000 for additional staff needed to manage our increased production volume. An increase in the Chinese labor rates totaled $238,000, higher freight costs of $124,000, and 1-time costs of $229,000 associated with increasing the amount of tooling inventory to support higher production levels.

In addition, the changes in our product mix increased our costs by $286,000. The product mix change was due to higher sales of isolators, collimators and GRADIUM lenses which all have a higher material cost. Unit shipment volume in precision-molded optics was up 38% in fiscal 2011 compared to last year. Direct costs, which include material, labor and services, was 27% of revenue in fiscal 2011, as compared to 24% during last year. Even with these cost increases, we were able to decrease our average cost per unit by 10%. However, this cost improvement was offset by an average selling price decline of 21%. This decrease in selling price was primarily attributable to competitive pricing pressure of precision-molded optic lenses and product mix changes. We intend to continue implementing our cost reduction plans and productivity improvements to improve our financial results.

During fiscal 2011, total costs and expenses were higher by $626,000, at $4.8 million compared to $4.2 million for last year. Last year, there were several 1-time events that netted a decrease in spending of $625,000. These 1-time events included D&O insurance payments to refund legal expense and reversible accruals for litigation and royalty payments. In fiscal 2011, we had higher salaries and benefits costs of $154,000. And an increase of $95,000 in stock compensation, offset by a decrease of $262,000 in legal costs.

Interest expense was approximately $606,000 for fiscal 2011 as compared to approximately $728,000 for last year. Approximately $5,600 of the interest expense for last year is attributable to our equipment term loan and our capital equipment lease. The convertible debentures issued on August 5, 2008 account for approximately $606,000, and $722,000 of interest during fiscal 2011 and 2010, respectively. This represents periodic interest of 8%, amortization and write-off of related debt issuance costs, and debt discounts. Included in these totals are related debt discounts, debt issuance costs, and prepaid interest for $262,500 of our debentures, which were converted into common stock during fiscal 2010. And it also includes $132,000 for loss on extinguishment of debt, which was incurred when we extended the term of the debentures.

Net loss for fiscal 2011 was $1.6 million, or $0.17 per basic and diluted common share, compared with a net loss of $561,000, or $0.07 per basic and diluted per common share for last year. Weighted average shares outstanding increased to 9.5 million in fiscal 2011 compared to 8.1 million last year, primarily due to the issuance of shares of common stock related to the conversion of debentures to common stock, which happened during fiscal 2011.

I now want to talk about a few areas on the balance sheet. Cash and cash equivalents totaled $929,000 at June 30, 2011. Total current assets and total assets at June 30, 2011 were $4.6 million and $7.1 million, compared to $4.8 million and $7.5 million, respectively. Total current liabilities and total liabilities at June 30, 2011 were $1.5 million and $3.1 million, compared to $1.1 million and $3.2 million, respectively, for last year. As a result, the current ratio as of June 30, 2011 decreased to 3.01 to 1 compared to 4.41 to 1 as of June 30, 2010. Total stockholders equity at June 30, 2011 totaled $4 million compared to $4.2 million at June 30, 2010. As of June 30, 2011, our backlog of orders scheduled to ship in the next 12 months was $3.9 million compared to $2.9 million as of June 30, 2010.

I would now like to turn the call back over to Jim for some closing comments.

Thank you, Dorothy. The Company has made good progress in the fourth quarter of fiscal 2011 and we're excited by the opportunity LightPath has going forward. We have positioned the Company well to participate in some very large markets that total in the billions of dollars with our existing and recently released new products.

Our 3-part strategy is to, A, grow the low cost aspheric lens business. B, use our traditional aspheric lenses, isolators, collimators, and GRADIUM products to continue to generate cash flow to support the business. And, C, continue to invest in the development and production scaling of our molded infrared lenses for our future strategic growth. We believe the ability to mold infrared materials is an enabling technology to further commercialize infrared imaging and sensing devices.

We plan on growing our low-cost aspheric laser business by, 1, increasing share in the laser tool market. And, 2, broadening our customer base through direct sales in China and expansion of our distribution sales channel. Our continuing efforts to reduce our costs through productivity improvements, leveraging purchasing volume and improving tool life will enable us to reach a broader market with lower average selling prices. As we continue to successfully implement this strategy, we anticipate significant growth for the Company in the future, which we believe offers significant financial rewards for the Company and our shareholders.

This concludes my comments. And at this time, I would like to open the call for questions. Robin, would you please start the Q&A portion of the call?

(Operator Instructions) [Michael Diet], a private investor.

Thank you, Jim and Dorothy, thank you for the great report; it really sounds exciting. I have a couple of specific questions, thinking back to prior conference calls. You told us about some of the new distribution contracts in Europe where you expanded, I think, from Germany throughout Europe, and then I recall 1 in Southeast Asia, maybe Singapore. And I wonder if you could just give us a little sense of the geographic spread of this 18% increase in distribution and catalog sales.

And related to that is the idea of Japan, which I thought has had some softness. Does that represent at all any part of your market?

Okay. Let's start with what we did in Europe, Michael. We went to a master distributor from having a number of small reps and distributors all around Europe. And when we went to this master distributor, which is AMS Technology, they have, I believe it's 5 offices in the various countries in Europe, with their headquarters in Germany. And we've seen almost a doubling of the business that we do in that part of the world through that arrangement. So that part's worked very well for us.

And in addition to that, when we first did this, we had opened another agreement with another distributor who had quite a big operation in Asia, and was opening some channels in North America, where we didn't have distribution coverage. That particular distributor really hasn't done anything for us in Asia, but he has done pretty well in North America. So that's still a building relationship.

And we have since added, I believe it's 4 additional optical distributors in China, and that has worked, or we believe will work, very well. Now, those are relatively new, so we're still building that relationship. But we expect that channel to start to contribute very well.

Now, in addition to that, we've expanded our direct sales in China, and that's where we're really seeing some really good traction in the laser tool market, industrial tools. And that's where a lot of the unit volume growth that we spoke about has come from. So we believe it's working very well, and we're getting much wider coverage. And as these new distributors come online, we expect that that will continue to contribute in the Asian market. Japan is certainly a part of that. We do have some representation in Japan, but we don't do a great deal of business there to date.

We also changed representatives in Israel to a much larger company, and we also believe that that's going to pay off big dividends. He's very well connected into the defense industry in that country. And we're doing an awful lot of quotes, so that's a very good sign; that's the beginning. And so we really feel that we're going to get some good traction out of that expansion, and doing that through that type of a sales channel.

Great. To shift the focus back to the US -- over many conference calls, you've talked about the Navy contract, and how that's been really good at helping develop your high-end capabilities. And I wondered if you could tell us a bit more. Just over the past quarter, have there been any follow-up sales or related activity under this Navy work?

We are capitalizing on the work that we did under that SBIR contract for our own purposes. There really hasn't been a lot of direct follow-up through that, but it did teach us how to mold larger optics. We got quite a bit of information about the material systems that we were using. We are growing that infrared business quite well, at a good pace. And we learned an awful lot about how to mold chalcogenide material through that contract. So it was a very worthwhile contract. And I expect that indirectly we'll get great dividends out of that going forward. That's an area -- that's where we really think our strategic growth is going to come from, as we continue to develop that process.

Now, the process works very well. It's too expensive, given what the marketplace -- what we would like to do in the marketplace. So the next step for us is to take the actions that we've got lined out in our business plan for that product line to reduce that cost. And we would anticipate that we will be able to reduce that cost by at least half. And if we get close to that, we're going to be very successful in that marketplace because that means we'll be able to provide a molded optic into the infrared space at a very competitive price. Particularly compared to a germanium diamond-turned lens, which is kind of the standard today.

Sounds great. Last question. As I think you mentioned on the last call, getting a lot of new equipment over in Shanghai. Is that in place so that you can take added volumes without any more capital investment?

Yes, the capacity expansion that we did is in place and operating. One of the reasons you saw a bigger increase in unit volume in the fourth quarter as compared to the whole year is -- we're starting to see the acceleration of that volume build in that business. And 1 of the reasons we're able to do that is because we've expanded that capacity. If things go the way we've planned, we'll be looking to expand that again to set up our fiscal-year 2013.

Great, thank you very much.

[Steve Donovan], a private investor.

First of all, I was really glad to see that you eked out a profit in the fourth quarter of $429.

It's better than being minus $400, I'll say that.

I think it's very significant. And that is the second profitable quarter in LightPath's history, isn't it?

I think it's maybe -- at least in my tenure, we had 3 profitable quarters a year ago. But they were somewhat helped by these 1-time accruals that we were able to do. Now we're doing it without any help, so it's a significant difference. And I think the other thing that's significant, Steve, is that we are at an operating level -- we are generating positive cash flow. We're spending a little more cash, but all of that difference between what we're generating and spending is being put into growth and capacity expansion.

I find it very encouraging that you're able to do that at revenues that aren't that robust.

Right, and that's been the plan. As we continue to push that top line higher, then I think we'll start to see the kind of results we would all like to see on the bottom line. And I don't think that's very far in the future.

Wonderful. Couple of things here. On the instrumentation side, it was up 29%. Can you mention what applications that was for, and perhaps who the customers are?

Those really have to do a great deal with sometimes collimators. But from a lens point of view, we developed a family of lenses that we call blue lenses, which are short wavelength, around 400-micron type things. And those are for microscope-type instruments or medical instruments like cytometers, where you take a sample and put it in a fluid, and shoot a laser through it, and use it to count cells. Those are the types of applications. So it's companies like Mindray that we sell that kind of thing to. And I think there's a company called Benchmark that does a lot of medical instruments and those kinds of applications.

So that's a high end lens. It's a very high-performance lens. And the shorter the wavelength, you can see smaller and smaller things, so it allows them to get more information about the characteristics of these cells as they are using them in these various instruments. And that about more than expands my knowledge of how they are used, because it's a pretty technical field.

Thank you. In the same vein, the IR growth, can you mention the application there, and who the customers might be?

I think the kinds of applications that we're going after in the infrared -- part of it has to do with the paramilitary or defense-type applications where you're doing IR countermeasure type devices. Or thermal weapon sites is 1 we would like to be involved in, and are starting to see some activity in. Firefighting cameras, where you're doing heat sensing type things.

On the commercial side, you have these quantum cascade lasers now which are coming out. And there's a lot of applications, particularly in sensing devices. Gas sensing is 1 where you're looking for different kinds of gases. Again, preventive maintenance-type applications, where you're looking for hot spots. And then there's the night vision, security cameras and those types of things.

So, as we get the cost down, and we've had -- in infrared technology, the cost was always determined by the sensors. And these focal plane arrays had to be cooled. Now the technology has progressed to the fact that you have uncooled focal planer arrays, which makes them a lot less expensive. So that cost has come down.

All the components in these cameras, et cetera, have been reduced, with the exception of the optics. So, the optics are the thing that has to come down. And that's why we're so excited about this molding technology, being able to reduce the cost of these optics for these types of devices, and why we think it's such an opportunity for LightPath.

Thanks much. Another question -- how could I get a hold of the list of the 25 photonics companies that is in that index?

I'll tell you -- 2 ways, Steve. I can send it to you, or I could put you to their website -- it's OEM Capital. And their website is www.OEMcapital.com. And you will see that they have -- they put out a monthly performance thing that has these companies in it. We are by far the smallest company on the list, but we're in there with the Coherents, JDS Uniphases, and Finisar, and 2-6, O'Clara, [O-fere] and those kinds of people. So it's a pretty prestigious list of photonics companies, and how they are performing in the marketplace. It's an interesting newsletter, and they put it out once a month.

Great, I'll get a hold of that. And that 75% refers to the stock price?

Yes, compared against the S&P 500 index.

Okay, got it. Moving along here, I always like to get the headcount, both in Orlando and in Shanghai. Can you give that to me?

Yes, I think we're at about 200 total, with 56 in Orlando, and the balance in Shanghai.

And then finally, you saved $60,000 by eliminating Investor Relations. And when I just look over all the press releases that you've had in the last couple of years, there's been a real absence of press releases on anything, except the quarterly reports in the last 6 to 12 months. Do you plan to leave things like that or --?

I think, as it makes sense, Steve, we will continue to try and do a better job of communicating to the investment community. And if we need to do some more Investor Relations-type work, I'm certainly open to doing that. It's a matter of how I fit it into the budget. And if I spend money on that versus developing a new product or pushing our strategy forward and how that priority works. But as we get that top line going and we generate better cash flow, then we'll certainly be doing some more of that.

I'm just glad that you sacrificed that and got a profit. Thanks, good luck.

(Operator Instructions) Bob Ainbinder with JP Turner.

Jim, my question is regarding the annual results. We've seen a big jump in the cost of goods, and I know you touched upon it in your presentation. I believe it was up a little over $1 million, as far as the cost of the goods. What specifically do you plan on doing to counter that increase in cost?

Okay. That cost was driven by 2 things. First, there were some expenses in there that were associated with ramping up the production. We had to hire a bunch of people in China. We put in a bunch of new machinery. We spent a significant amount of money increasing the tooling inventory to a level so that we could support this unit volume. Now, those costs won't necessarily repeat, unless of course we repeat that growth, which is not a bad thing. So that was a piece of it.

The other piece were -- we had some headwinds that we have to overcome in other ways. We had some increases in the Chinese labor rates. There were increased freight costs. These are just things that cost more money to operate, and we need to offset those.

And we have a very good planned cost reduction program to address costs in general, and continue to improve our manufacturing costs. And those things include changing the way we do our AR coating and bringing that in-house. We believe that we can reduce significantly our coating costs by doing that, maybe as much as 50%.

You saw that we had a 22% increase in productivity over the course of the year. We certainly will expect that to continue. We have some plans to improve that. And certainly as our operators gain experience, they will get better. We had a lot of new people this year, so just that alone will help that.

And as we get these higher and higher volumes -- now, instead of buying tens of thousands of preforms and glass materials, now we're buying millions of pieces. And that leverage translates into lower purchase costs for glass that we can do. When we were smaller, we didn't have much leverage in the marketplace. And now we're beginning to develop some leverage, and we're certainly going to use that to partner with the right kind of people that can help us reduce our material costs.

And then a big 1 is continuing to improve our tool life as we go forward. We spend a lot of effort working on our hard coating systems and stabilizing that, and improving that so that we get a much better life out of our tools. We have some other things that are working on oxygen content in the pressing stations, to prevent oxidation on those tools, which is a big factor in their life. And so we'll continue to make those improvements. And we see a path to significantly improve our tool life, which is a big cost factor as we go forward.

So we have a very well-defined and specific plan to reduce our costs. And obviously, we continue to look for opportunities to do that. And we will address that and fight those cost increases as we go forward.

And as far as margin deterioration, we have seen record volumes, yet we've continued to see pricing pressure. Do you see that stabilizing as we go forward?

I think the pricing pressure's going to continue, but I don't think it's going to present itself as aggressively as it did this past year. I think we're through this -- we're getting down to the prices where I don't think people can get much lower. And so as long as we can compete down there, we will.

The other thing is, is we're getting to the point now where -- as I said, I think right now we've got 25 new lenses in development. And we have a lot of opportunities with those. And the majority of those are at pretty good prices. So now we've got this volume to a level where we can start to pick and choose a little bit more which opportunities make the best business sense. And so I think that will also help stabilize our pricing as we move forward.

And just in trying to understand the overall strategy as you move forward, could you just give us a little more color as to what the going-forward plan is, with regard to the entire business?

Yes, we've really transformed LightPath into a different company. And we really aggressively went after reducing our cost structure. We were very successful doing that. And now we're aggressively going after growth, and I think we really need to start looking at LightPath as a growth company.

And the way we're going to accomplish that, as I outlined, and I just want to emphasize it, it's a very straightforward, simple strategy. It has 3 major elements to it. The first element is to continue to expand the low-cost PMO, or precision-molded optics business, and really go after increasing our share in this laser tool market, where we've been very successful. And continue that effort.

And also while we're doing that, we're going to broaden the customer base. We talked about how we broadened and added to our distribution sales channel and increased our direct sales in China. And those 2 things are really to address that growth. And that's where we expect the Company to be able to grow in this coming fiscal year, or in the fiscal year we're currently in. That's the short-term growth that we've got underway. And we can see our way to growing pretty substantially through that effort. And at the same time, just those cost reduction things that I just talked about go along with that, to help protect that margin and improve that margin as we go forward.

Then the traditional business, the legacy PMO business, the isolator business, the collimators, the GRADIUM, those product lines will continue to generate cash to support the business. And that's where we'll get our major cash flow going forward.

And then the third part of it is the strategic growth, where we'll be investing in the infrared product lines. And in the coming years, in the next couple of years after this fiscal year, we should see significant growth in that product line as we get that scaled up and established in the marketplace.

So that's really the 3 steps to our strategy. And I think even though there is a little bit of chop in the tactics as we go through the -- driven by the macroeconomics that we have to deal with, and some of our successes and failures as we go forward, the key point here is the major elements of that strategy are working. And the Company is growing, and we're moving it forward. And we're really excited about the potential and the opportunities. And I would be extremely disappointed if we aren't able to grow the Company somewhere between 20% and 30% this year.

Excellent. Okay, great, look forward to the next call.

It appears there are no further questions at this time. I would like to turn the floor back over to management for closing comments.

Thank you, operator. I would like to thank our shareholders and everyone who has participated on today's call. I would also like to thank the team at LightPath for their hard work and dedication. And I look forward to updating you again on our fiscal 2012 first quarter conference call.

If you have any further questions, please feel free to contact myself or Dorothy. And you can visit us online at www.LightPath.com. And with that, I wish you all a great day.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.