ManTech International Corp (MANT) 2012 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the ManTech fourth quarter fiscal year 2012 conference call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time.

(Operator Instructions)

Today's conference is being recorded.

I would now like to turn the call over to Stuart Davis. Please go ahead, sir.

Thank you, Jamie, and welcome, everyone.

On today's call we have George Pedersen, Chairman and CEO; and Kevin Phillips, Executive Vice President and CFO. In addition we have Lou Addeo, Bill Varner and Dan Keefe. Lou is now in his new role of Executive Vice President for Corporate Development and Strategic Acquisitions and Dan joins Bill as a Group President and Chief Operating Officer.

During this call we will make statements that do not address historical facts and thus are forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to factors that could cause actual results to differ materially from anticipated results. For a full discussion of these factors and other risks and uncertainties, please refer to the section entitled risk factors in our latest form 10-K and our other SEC filings. We undertake no obligation to update any of the forward-looking statements made on this call. + Now I'd like to turn the call over to George.

Good afternoon and thank you for participating in today's call.

We entered the year with record levels of bookings, backlog and cash. From this foundation we believe revenues can grow in 2013 based upon momentum on current programs. As evidence of this, we have added more than 600 people to the direct staff and our headcount in the past four months.

In 2012, despite record levels of bookings, revenues did decline primarily from reduced material and subcontractor income flows. We had very little offsetting revenue growth from acquisitions because we adopted a very conservative approach due to the uncertainty of the government appropriation plans.

We believe caution around acquisitions in the defense industry at that time was warranted and we have focused on our acquisition strategy for healthcare, commercial cyber and other nondefense related marketplaces. With two small acquisitions early in 2012 in the healthcare and commercial side, but we have gained experience in these new market -- growth markets. And we are now ready to add to our capability that we set up there.

With our strong balance sheet and visibility into future cash flows, we can be more acquisitive this year.

Last month we made our second acquisition in healthcare IT, ALTA Systems, which extends our involvement offering into centers of Medicare and Medicaid services, or CMS. Around our core Defense and Intelligence business we are -- we will act when funding is known.

To accelerate our M&A program, I have asked Lou Addeo to take on a new role and spearhead our efforts to identify companies that can open up totally new markets and position the Company for long-term growth. With Lou moving up, we were able to promote Dan Keefe to President and Chief Operating Officer of the Technical Services group. Dan has been with ManTech since March 2011, previously Executive Vice President and General Manager of TSD. The gentleman is a retired army brigadier general. He understands our customers and has been instrumental in guiding our operational direction and strategic planning.

I will be working directly with our Healthcare business and we are aligning our other market -- emerging market group businesses and DoD, space, federal, civil, environmental support under Bill and Dan.

We will leverage operational support infrastructures and improve our competitive position. Bill will continue to lead our cyber initiative and he had continuing success in 2012. Our deep leadership team has enabled a seamless transition.

Kevin will now provide you details of our financial performance and our outlook. Kevin?

Thank you, George.

Revenues for the fourth quarter were $622 million, which was lighter than anticipated as a result of two major factors. First, $49 million in deliveries of cloud computing systems that we expected in the fourth quarter were made in the first quarter, of which $35 million is included in contractual inventory or a balance sheet cash flow statement as of December 31.

Second, $24 million in material purchases from our MRAP and S3 businesses were pulled back due to reduced customer demand. Despite the delay in cloud computing system deliveries, our intelligence and cyber business grew 16% in the quarter but this was offset by slowing ODCs on their (inaudible) S3.

The MRAP family of vehicle support work contributed $140 million in the quarter. The services portion is ramping up as we consolidate work across equipment manufacturers and other systems providers. S3 contributed $139 million in the quarter, which was down $42 million in the fourth quarter of last year and down $17 million from the third quarter.

The WINS from the third quarter have been slower to ramp and material purchases have gone down as more spare parts are available from existing systems being decommissioned in theater.

For the year, revenues were $2.58 billion. Intelligence and cyber revenues were up $84 million compared to 2011 but revenues from S3 were down $319 million.

For the quarter, the percentage of work as a prime contractor remained steady at 91%. The trend away from time and material contracts continued, dropping from 33% to 23% of revenues.

Cost plus contracts increased 8 percentage points to 60%, and fixed price contracts increased 2 percentage points to 17%. By the end of the year we expect to stabilize at about 20% time and materials contracts.

Operating profit was $37.7 million in the quarter for an operating margin of 6.1%, down from last quarter. The largest driver of the change is a $1.2 million impact for a short, fixed price transition period on the new CLSS contract.

HBGary incurred a loss of $1.8 million on continued R&D investments, which was more than planned. We are still capturing new customers for HBGary platform but sales are smaller and more incremental than expected.

G&A was lower sequentially but higher as a percentage of revenue, given the slipped AMBIANCE sales. Net income for the quarter was $20.2 million in diluted earnings per share for the quarter were $0.55. The effective tax rate 40%, 140 basis points above last year's fourth quarter, which equates to about $0.02 a share.

For the year, operating profit was $171 million, net income was $95 million and diluted earnings per share were $2.57. Profitability was affected primarily by the migration away from time and material contracts and increased price competition on in-theater support. Except for the investments in commercial cyber, the profit margin on our expanding intelligence and cyber work was consistent with last year.

Now onto the balance sheet and cash flow statement. During the quarter we used $62 million of net cash to fund operations. Operating cash flow for the year was $126 million, or 1.3 times net income. This performance for the year is consistent with our long-term model. With capital expenditures of $15 million, pre-cash flow was $111 million.

DSOs increased (inaudible) for the quarter and the year. Across the business we experienced delays in customer payments compared to the third quarter, attributed in part to some new contracts and end of the year holidays. We lost several days of receivable DSOs to the one-time setup of billing arrangements for the $2.85 billion CLSS contract.

Over the year we grew our cash and equivalence balance ending at $135 million, which is a record year ending balance and gives us the fire power we need to position the business for growth. To that end, in January we invested $2 million to purchase (inaudible) which provides an entree in to CMS through the $4 billion ESD contracts.

The Board has authorized $0.21 per share dividends to be paid in March. Given the market uncertainty and our intent to pursue acquisitions more aggressively, we expect to maintain the annual dividend at $0.84 for 2013. We believe that an annual yield in excess of 3% is an appropriate and compelling return of cash to shareholders.

Our first objective for capital deployment is to pursue repositioning and growth but we will revisit capital allocation during the year if there is clarity around appropriations and acquisitions do not materialize.

Turning to the business -- turning to business development, bookings for the quarter were $222 million for a book-to-bill ratio of 0.4 times. 57% of the bookings were for new work. The record $4.8 billion in awards for the year provides a great foundation entering 2013.

Backlog at the end of the quarter stood at $6.5 billion, which is up 38% from last year. And funded backlog was a record $1.8 billion, which is up 34% from last year. At the end of the quarter, we had a total qualified pipeline of $29 billion, of which $3 billion is submitted and awaiting adjudication. Our pipeline increased by about $3 billion primarily within our Health Care business.

We entered 2013 with strong awards, backlog and growth in our direct label workforce. However, we must also account for uncertainty in the market. Accordingly, our initial expectation is for revenues of $2.6 billion, affecting lower material purchases but increased labor.

Growth will come primarily from momentum on our current programs. For example, we have already delivered systems in the first quarter of our AMBIANCE program that exceed the total revenue and the total program for 2012. And we have added more than 500 employees on our CLSS program over the past four months.

92% of revenue guidance should come from current business, which is higher than normal given that we are going into the year. Funded backlog accounts for more than two thirds of guidance, up from a historical average of 45% to 55 -- to 50% at this time (inaudible).

We expect net income of $88 million and diluted earnings per share of $2.36. Implied operating margin of 6% is consistent with the fourth quarter. We expect to reach a margin inflection point this year as OCO margins stabilize and the OCO percentage falls in relation to faster growing and higher margin work in intelligence, cyber and healthcare.

Built into our guidance are an effective tax rate of 38%, a fully diluted share count of 37.2 million shares. Incorporating the cash collected from the contractual inventory delivered in the first quarter, we will push cash flow from operations from our usual 1.2 to 1.5 times net income to 1.6 to 1.9 times net income for 2013.

Finally, DSOs should be around 70 days.

Now Lou will speak to his new role. Lou?

Thank you, Kevin.

I'm excited to help reposition the Company for long-term growth as we prepare for a smaller footprint in Afghanistan. ManTech has been an enviable balance sheet and platform of capabilities, customers, MGA graphic reach to effect this change. Since 2012 we have acquired three smaller companies in the healthcare and commercial cyber markets. With experience in these markets, we are able to be more aggressive.

As we exit 2014, I would expect these business areas to be generating $300 million in revenue and at least $30 million of EBITDA. I'll also seek out new areas of growth for ManTech in other adjacent markets.

We are actively reviewing expansion areas and I look forward to reporting back as we acquire companies in these markets. ManTech has a long history of adapting to changes in the market and finding new areas to accelerate top line growth and generate solid returns. Even with this initiative, though, we will remain primarily a national defense provider.

Now Bill will talk to the cyber business.

Thanks, Lou. As Kevin indicated, the intelligence and cyber business showed strong growth in revenue and profit in 2012 and we are positioned for even more in 2013.

Our growth is driven by the conversion of cyber, cloud and IT consolidation and our positions at NSA, DISA and DIA place us in the center of that movement. Cyber in particular will be a growth market for years to come.

Next week ManTech is organizing a panel discussion at the RSA conference in San Francisco on active defense. We are truly thought leaders in this area and, as policy becomes clearer, we expect that commercial businesses will seek to shore up the security of their data and networks.

To that end, last week President Obama issued an executive order on cyber which focuses on data sharing but stops short of requiring participation. It does not take the place of legislation, but it is a promising start.

As part of the realignment, NCIS is adding the space/space work at NASA and the US Air Force and work with DARFA from EMG. With cross agency sharing initiatives growing between the space/space agencies, intelligence agencies and the government R&D centers, we will maximize the capabilities for our customers and provide scale within ManTech. We are also picking up work that requires substantial systems development, such as our work for the Patent and Trademark Organization.

Dan?

Thanks, Bill.

I appreciate the opportunity to lead TSG as we continue to support our customers on their most critical national security missions.

In addition to our support of the Department of Defense and Department of State, TSG will now house the engineering practice focused on border security and environmental studies.

We have completed the transition on the CLSS contract, are in the midst of consolidating the labor from other providers as the vehicles are fully in sustainment. We are looking to add another 200 people to the 500 that we have added on the contract since award. We expect to begin to ramp back down to previous levels starting near the end of the year.

Similarly, on S3 we are expanding our direct labor from the new third quarter wins and the expanded work share requirements, but procurement levels are falling. We also have significant [stealing] available under the existing S3 task orders, which our customers can use should mission requirements arise.

Netting all of these factors out, we expect that our OCO work should be fairly stable through 2013 and be better protected if we go through sequestration.

Back to you, George.

In summary, ManTech is well positioned for growth. Our core business consists of high priority programs and we have emerging businesses in new growth markets.

We have seen basic changes in budgets and missions in the past and we are able to transition to new and expanding marketplace here and around the world.

We believe we have the technology, strength, the cash flow and market position to continue to grow and adapt to change. Most importantly, we have the financial wherewithal in terms of cash, which is $190 million today and $500 million in line of credit to drive in the new market.

With that, we are ready to take your questions.

(Operator instructions)

Mark Jordan from Noble Financial.

Question relates to how the revenues may fall in the year on a quarterly basis. You allude, I think, to $49 million worth of hardware delivered on the cloud computing AMBIANCE contract.

Is there additional system hardware that will go on that contract? And could you comment, again, sort of the dynamics on how you see the revenues fall through the year?

Sure. So given the uncertainty in the market, with the exception of the bump in the first quarter for this cloud computing flow-through, projecting a fairly flat quarter-to-quarter revenues through the end of the year getting to the $2.6 billion. So a little bit of bump-up in Q4 and, we're frankly projecting some level of growth even amid uncertainty from intelligence community customers, healthcare offsetting some of the DoD uncertainties that are out there.

Okay. Question for George, as we get closer to the potential sequestration deadline, have you gotten a sense of how your customer base is going to be treating your existing funded backlog relative to sequestration?

We've had conversations with everyone we could possibly talk to. The problem is no one really knows when the congress and the president are really going to implement. I can tell you they have all spent a lot of hours preparing for it, but nobody can sit today and tell you how it will play out. But they are really working the problem.

Thank you.

George Price from BB&T Capital Markets.

George, are you there?

Sorry. Mute button was on. I apologize. Thank you very much for taking my questions.

Just to follow-up on the second question -- or on the question that was just asked around sequestration, obviously there's a lot of uncertainty but just to be clear, what are you and are you not factoring in your guidance for 2013?

Well nobody has a crystal ball on what's going to happen with sequestration, but as we indicated from a percentage of guidance, our funded backlog referred business, we are taking a conservative view based on the uncertainty.

So we are trying to factor in that uncertainty into the $2.6 billion, recognizing that we have growth on AMBIANCE, growth in headcount to come to a $2.6 billion mark. We believe that this is reasonable.

Does it cover the worst-case scenario? No ability to tell right now. But we would see that the OCO work, the cyber work and a component -- the several components of the intel work -- we think are going to be more protected. And as a mission-focused Company, we think that we are in fairly good shape.

Okay. And do you have any sense -- shifting from the margin side, flattish revenue down EPS implies margins down in '13 following the decline in '12.

What's driving that in '13? Because you mentioned you had a higher mix of labor versus materials, which I guess would -- wouldn't be consistent with that. Is that more decline in competition in OCO or is there something else driving that?

All declines in margin are OCO competitive-related. So if you think about the year-over-year decline from the $171 million down to $157 million, there's a greater amount of that that's related to the overall fee returns from overseas work, which is offset by above-average returns on some of the intelligence community, healthcare and cyber work that we have. And that nets out to a 6% estimate.

Okay. There's no flow-through of just broader transition away from TNM to cost plus and other parts of your core business unrelated to OCO?

The Army has been the greatest mover towards cost plus from TNM and the greatest component of that has been related to OCO-type programs and an S3-type program. So they're -- they tend to be as one. There hasn't been a significant shift in some of our intelligence community. They actually contributed to some of the increase in the fixed price. So that's why we tend to think that the mix of our business between cost plus time and material and fixed price for 2013 will level off with the 20% mixed on TNM.

Okay. Last question is you mentioned acquisitions. You're going to be more acquisitive. Can you talk about maybe beyond just cyber or healthcare? Can you talk in what areas in particular will there be any focus, for example, on purely commercial areas?

Maybe, Lou, you could comment on given your increased focus in this area -- what the key areas are that you're looking at -- what we can kind of expect as the year goes through? Thank you.

Okay. We have a fairly substantial set of capabilities or services related, for the most part. And we've got a head start relative to some commercial support on the -- out of Bill Varner's business and in the healthcare business. So we look to see whether or not we can project our capabilities in those areas, at least initially.

But using the rest of our capabilities and system engineering, mission support, procurement, supply chain management and logistics, we use baseline capabilities, that is our working ManTech DNA, to figure out where the long-term play is. And, yes, commercial is a prospective play for us.

Okay. Great. Thank you.

Bill Loomis from Stifel Nicolaus.

Just a follow-up again on George's question, Kevin, on the margin. So all the decline in margin are OCO competitive-related, but there's a couple things there. You talked about the higher direct labor and you're adding people onto your OCO contracts so usually the margin on that labor component on CLSS, for example, was substantially higher than the pass-through margins.

So I guess I'm still -- with that contract being roughly 18%, 20% of business, I'm still trying to understand why the margin still wouldn't be higher than 6% because you have the cyber and healthcare is going up, HBGary hopefully less losses, a lot of positive things happening on direct labor side, even in CLSS. That kind of implies that the margin on that CLSS program on the new contract must have been substantially below even on the direct labor -- the old one.

Yes, it's a combination. When we think of OCO it's the S3, which does have a lower labor-based margin than the S3 programs we had prior to the September 30 awards and the final negotiations on those as well as a combination of the fee that we are going to get from the CLSS labor, combined with the material purchases.

All of those are coming into play in combination for the returns. Yes, we are going to get less fee on a higher labor base in theater both from the MRAP work, based on the competitive environment, in addition, and equal or greater to is going to be the S3 work.

If we took that 35% or kind of OCO impact war related business out, what -- can you give us -- I think it is important when we think about the business post-Afghanistan -- what the margin profile and trends are on the business if we remove that OCO-related 35% of business both CLSS and S3 out.

Broadly, if we take for 2013 in the [6%] returns and factor out the upside or downside from HBGary in the expected in-theater returns, the expected return from a margin basis would be somewhere in the 7.5% range on the balance of the business.

And is that flat or down or how is that trending?

That's trending up from 2012.

Okay. And just one quick question on the $49 million of the cloud infrastructure. Is that equipment? Typically we don't see any margin or very, very little margin on that.

Yes. So there is margin associated with the type of work we are doing in cloud computing because it does include [fixed] price delivery within systems integration components. That said, it has a much higher component of materials in it. So it's a mixture at this time and we are going to get return on that.

Okay. And so that it will be a bump -- with that hitting in the first quarter, for example, I know you talked about revenues being flatter sequentially until the fourth quarter but wouldn't the first quarter be a little bit higher with that work getting shifted out?

It could be higher, but I would caution against that because there are so many other factors in Q1 with new taxes and just all kinds of different stuff that you have to build into it.

Okay. Thank you.

Gautam Khanna from Cowen and Company.

Yes. Just a follow up on George and Bill's question on margins. When you go back to 2011, relative to 2013, it looks like sales will be down 9% over that period but earnings down 35%, roughly. I understand the cost of goods sold, the gross margin pressure, but also focusing on SG&A, it's crept up a bit over that period.

Is that something that you think you still have leverage to take down or is that something that's just the higher rate we are going to be stuck with for a while?

If you think about G&A, we are projecting rough order for '13 -- a gross profit of 13.7 and G&A of 7.7. It will be creeping down for the non-HBGary component or non-component that requires R&D and sales for that piece of the business.

As an example, in 2012 roughly $7 million out of the $8 million increase in that G&A relates to supporting R&D and sales for that market. And we think there will be a decline in G&A overall but it will be offset in part by repositioning in that market.

Okay. Thanks. And could you remind us how much HBGary lost in 2012?

So for 2012 it was around $5 million.

And when would those actually turn -- when do you expect it to turn -- or at least break even?

The investment should provide a return coming into the second and third quarter of this year based on all the activity we have in some of the commercial sets. And obviously there's a lot of news out there about risks that people finally adapting to.

Okay. And may I just ask some of your opening comments with respect to the dividend? I think you mentioned a 3% number. Is that the trigger if the stock were to go down? Is that how you calibrate? You have to be at 3% or better and then if there's a change in the stock price, you would reconsider it? Or how do you think about the dividend policy? Because you did institute one a couple years back and haven't really increased it since. Just wondering what's the longer-term plan here?

Our dividend policy is a judgment call between the use of operating cash flow, the return on the yield to the stock price and, like with anyone, it's a judgment call as to how much more cash we deploy for that. And we just think that a 3%, 3.5% return is reasonable in the type of market we are in and then we will look at our capital deployment alternatives around that as we evaluate quarter-to-quarter what's happening.

Thanks.

Tobey Sommer from SunTrust.

This is Frank in for Tobey. Quick question on cash flow. Your DSOs were up a little bit driven by that one-time set up of billing arrangements. Is that expected to reverse over 1Q or can you talk a little bit about cash collection throughout the year?

Yes, so it will reverse through in 1Q. We have already received a fair amount of that cash collection. Again, should be for the year about a 1.6 to 1.9 times net income because of the Q1 offset for this inventory.

So it should be fairly consistent, I think, with the exception of collecting the cash in Q1 with our prior years and the Q2 and Q3 will be a little bit heavier than Q4.

Okay. Great. And could you give the organic growth number for the quarter? And just to kind of confirm where [we are at], is there any acquisition, revenue incorporated, in the revenue guidance?

There's no acquisition revenue in the guidance, fourth-quarter organic was 11% drop.

Okay. Great. And then could you speak a little bit to the hiring environment? You guys have added a lot of folks and you continue to look to do so. What's the hiring environment out there look like?

You want to go first?

This is Dan. Positive. We have not had difficulty in finding -- in this question of CLSS mechanics. And so I think that I have not seen really any change year over year in the hiring environment.

This is Bill. We've had a lot of success in hiring in 2012 for the intelligence community business and we expect that to continue and even grow in 2013. It was a good year for hiring all the intelligence professionals that we need. Thank you.

Great. Thank you very much.

Brian Kinstlinger from Sidoti & Company.

The first question I had as it relates to your guidance, how much revenue do you assume related to the just completed acquisitions? Didn't you just complete -- what was it, the healthcare one and then there was another?

Yes so the ALTA acquisition -- the two acquisitions were built in -- will be at least $60 million. It could be higher, but that's what we have built in.

Great. And then on the MRAP contract, maybe I missed it. Did you say what kind of trends you expect in '13 versus '12 -- maybe revenue and margin since the mix is shifting?

Revenue will be fairly consistent to 2012. Margins will be down, basically the competitive bid and the returns.

Right, okay. And then you talked about acquisitions. What kind of deal sizes should we expect? Are they single larger deals that you made a few years back or do you expect them to continue to be smaller acquisitions?

This is Lou and George told me they have to be larger.

Can we define large? Are we talking a couple hundred million dollars in revenues?

It depends upon what the market bears. We are not going to do anything crazy. We have a good solid core business to look at as well as the new markets. But, yes, I mean we'd like to be in the market for the size and scope of business that we have done in the past.

We will be a little cautious about anything coming out of the defense side until we see what the president and the congress does. Last year we only did three acquisitions and none of them in the defense or intelligence business, which is the first time in many years.

But as I said a moment ago, we are sitting with $190 million in cash in the bank today and we have a cash machine. So we will continue to look. We are not afraid to go after larger deals, providing it's in the technology area.

Great. And then do you have any large recompetes that are expected to be booked here this year? And if so, are they on TNM?

It's Kevin. The recompete year this year is much lighter than the last two. 20% of our business is up for recompete with half of that built into the fourth quarter. So it's very back-end loaded and it's likely to slip just based on normal bid process. So it's not that heavy.

I would say that it's a mix of fixed price cost plus and it's in customer sets that really haven't moved more towards a universal decision on cost plus contracting.

Great. And then on award activity, can you -- given the current environment and potential sequestration, is it safe to assume 1Q will be light? And then on the fourth quarter, what were the new wins as a percentage of the total?

So new wins as a percentage of the total for Q4 were 57%. I would say that the Q1 award activity so far has actually been better than Q4 of last year. It's already going to exceed that so I wouldn't think -- there's not a freeze is my point. It's not slowing down any more than it did in Q4. We've actually seen a pick up.

There are about $13 billion of bids that the government expects to adjudicate this year that we are targeting. So they haven't slowed down the proposal activity as well. I think that there's a disconnect between their stated needs and the amount of activity towards the award timing. And we will have to see how that plays out for sequestration.

Great. Last question I have -- in case you need to go to your credit line as you use up your cash for acquisitions, can you just remind us the interest rate on that?

It's LIBOR plus 1.5%.

Great. Thank you so much for answering my questions.

That, by the way, is $500 million, as you know.

Yes.

(Operator Instructions)

George Price from BB&T Capital Markets.

Kevin, did you mention something about $60 million in acquired revenue? Is that acquired revenue in 2013?

60. Not in acquisitions but from the acquisitions we have made.

Okay. All right.

For the two healthcare businesses.

Two healthcare businesses.

Got you. Okay. For -- I mean, what is -- I know ALTA is pretty small. You said it wasn't material but what is that on an annual just for purposes of accuracy, what is that on an annual revenue base? $6 million or so?

Annual run rate, $6 million going up, yes.

Okay. And did you -- I apologize if I missed this -- but did you give any specific assumptions around level of S3 and MRAP for the year? Yes, you said MRAP revenue you expected to be the same margin down. What about S3?

Roughly consistent margin down as well.

Okay. And then last thing is -- was there anything unusual happening on the tax rate side in '13 or 40% a reasonable starting point?

38% is our tax rate for '13. I think the 40% was an anomaly based on the amount of permanent differences we had to pull through.

Okay. All right. Fair enough. Thank you.

At this time I am showing no further questions. I would now like to turn the call back over to the presenters.

Thank you, Jamie. I appreciate your help today. Given that there are no more questions, I guess we will end the call now. As usual, we've got members of our team around if you do have follow-up questions. Just shoot me a note.

Thank you all for your participation on today's call and your interest in ManTech.

Ladies and gentlemen, that does conclude the conference for today. Again, thank you for your participation. You may all disconnect. Have a good day.