Emerson Radio Corp (MSN) 2003 Q4 法說會逐字稿

Good morning and welcome ladies and gentlemen to the Emerson Radio Year-End Earnings Conference Call. At this time I would like to inform you that all participants are in a listen-only mode. At the request of the company, we will open the conference up for questions and answers after the presentation.

With us today from Emerson are Geoffrey P. Jurick, CEO and Chairman of the Board and Kenneth A. Corby, Executive V.P. of Finance and CFO.

I will now turn the conference over to Mr. Jurick to begin. Please go ahead sir.

Okay. Hello everyone. We welcome you to Emerson Radio's Fiscal 2003 Annual Results Conference. We hope you've all seen our closures this morning and I will now turn this call over to Kenneth Corby, our CFO who will take you through the pertinent numbers and we will answer some questions later.

Good morning everybody and thank you for joining us. Before we get started, I'd like to remind our listeners that the presentation, which we're about to give, contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995 that can be identified by words such as believe, expect, project and expressions that involve numerous risks and uncertainties. The company's actual results could differ materially from those anticipated in such forward-looking statements as results of certain factors including those set forth in the company's filings with the Securities Exchange Commission.

Revenues grew a strong 10% to $348m from $316m over prior year period attributable to the Consumer Electronics segment as revenues in the Sporting Goods segment remained relatively unchanged. On a consolidated basis gross margins expanded to 20.9% from 19.7% as both segments benefited from individual efforts. Selling, general and administrative expenses increased in absolute dollars due to increases in Electronics and reductions in the Sporting Goods segment. However, overall expenses were kept in check on Consumer Electronics using cost control measures.

Operating income increased to 90% to $19.5m from $10.3m, reflecting the continued strong performance of electronics and continued financial improvement in sporting goods.

In the current period, SSG wrote off all but $7.4m in goodwill due to accounting standards pertaining to intangibles and alike. On a consolidated basis this totaled $5.5m. Income prior to this inaudible change in accounting principal totaled $17m or 94 cents per share as compared to $19.4m or 52 cents per share in the prior year thus reflecting a 39% improvement on earnings basis to support an 81% improvement on a earnings per share basis.

We are netting income of $21.5m compared to $19.4m last year on an earnings per share basis which resulted in a 44% improvement to 75 cents per share over last year's 52 cents per share.

Electronic Segment. Revenues grew to $245m from $230m [inaudible] reflecting a 15.4% increase as audio, seen (ph) products and licensing revenues increased across the board which were partially offset by a slight decline in microwave oven sales. Gross margins increased due to margins improvements on core products and increased licensing revenues to which there are relatively no costs of sales associated. Selling, general and administrative expenses increased to $17.7m from $14.6m due to increased spending in wages, in bad debt reserves and insurance costs partially offset by a reduction in contracts and services.

Operating income increased 56% to $20.5m from $13.1m over the prior year. A further $11.3m benefit of Emerson taxes and operating losses recognized in the current period. As a result of the foregoing factors Electronics earned a net income of $27.9m in the current year compared to $21.3m over the prior year.

Sporting Goods segment. Net revenues were relatively unchanged at $103m this year versus $104m last year. Gross profit increased to $29.3m from 29.3% to 28.5% as revenues attributable to previously announced initiatives towards product sourcing, manufacturing streamlining and exiting certain less profitable product lines continue to benefit the results.

SG&A declined by 4.4% from $31m, from $32m due to declines in wages, depreciation and amortization and certain professional fees. Wage declines reflected the continued benefits of revenue migration to SSG's Internet Ordering Platform, which require less support staff to maintain than through traditional ordering. The net loss of SSG prior to the non-cash write-off of its goodwill, now its $1.6m in the current year as compared to $3.6m last year.

The write off of all of SSG reflected in the cumulative effect of change in accounting principal on SSG's Form 10K of which $5.6m is reflected in the consolidated results of operations. Following this accounting adjustment, SSG's net loss was $9m compared to $4m last year.

Consolidated Balance Sheet. The Consolidated Balance Sheet continues to improve and strengthen further attributable partially to the performance noted above and to the continued management of key liquid assets namely Inventory and Accounts Receivable. Cash receivable turnover improved further on top of prior year improvements and year over year increase in inventory reflects movement by SSG to additional sourced products and therefore additional stocking levels required to maintain this product and slightly higher levels of Inventory Electronic systems. Bank relations and liquidity remains solid with consolidated debt reduced by $17.6m. EBITDA was in a non-GAAP measurement available in our press release, reflects cash generated totaling $23.4m growing 50% over last year's $15.6m.

Continued profitability and debt levels reductions further improved Emerson's debt equity ratio. Additionally $4.2m shares were repurchased this past June of '02, thus partially benefiting fiscal 2003 earnings per share, the full effect of this repurchase will not effect or I'm sorry, or will impact fiscal 2004 earnings per share.

Looking forward, in the June quarter we expect June revenues to be slightly below last year's strong performance due to several factors. Last year's June quarter benefited from restocking efforts by retailers that were delayed to the June quarter, that appear this year to be pushed up farther. Retailers have reduced the number of weeks of inventory held in stock thus potentially deferring expected additional revenue and retailer buyers remained sluggish making it difficult to make predictions regarding full year revenue potential. In spite of this, we still believe that the full year revenues on a consolidated basis will remain strong.

Sporting Goods Segment. The migration of the Internet expected to improve as deemed to the current increase from 7500 orders placed in fiscal '02 to 20,000 placed in fiscal '03. We expect continued SG&A reductions to progress further, and we are looking to expand our retail presence and product placement within sports supply group.

Electronics. We continue to prepare for delivering products to San Liam (ph) in the September quarter. A combination of China's 1.2 billion population combined with China's number two electronics retailer San Liam, causes us to believe that this could be a significant revenue opportunity for this fiscal year '04.

Nickolodeon. Nickolodeon is an exciting addition to Emerson theme product. This too we expect to begin shipping products in the September quarter.

Europe. We look to continue ramping our presence up in Europe over last year's levels. This past year H.H. Scotch-branded (ph) Product Distribution increased 62%, and we are confident that Emerson's branded products, which we introduced last year will continue to favor reception by European consumers.

License Agreements. Our licensing arranged performed well this year and increased to $10.4m versus year's $6.7m. In 2004, we expect this strong performance to continue. Change in technology and SEC requirement pertaining to television digital reception capability are expected to be benefit our video licenses and therefore Emerson.

Accounts. We continue to drive the placement of Emerson branded products in a very interesting retail, both mass merchant, discounts and specialty. We also are optimistic that new accounts opened this past year such as Radio Shack and Blockbuster will continue to develop favorably, as we initiate business with Walgreen's coming into the current fiscal year. That concludes my comments on Emerson's 10K and our outlook towards the future. Are there any questions that Jeff or my self may answer at this point in time?

Thank you sir. The question and answer session will begin at this time. If you are using a speaker phone, please pick up the handset before pressing any numbers. Should you have a question, please press star one on your push button telephone. If you wish to withdraw your question please press star two. Your question will be taken in the order as it is received. Please stand by for your first question. Our first question comes from Michael Laconie (ph) from Sky Capital. Please state your question.

Yes good morning. Thanks for the update. Could you give us some color or comment further on the outlook in the coming year for the relationship with the Sanlynn Group (ph). I think I pronounced that correctly. This looks like a huge entity in mainland China. I do not know much about, but it looks, it looks exciting, interesting.

Let me, let me see if I can address that for you. We, generally speaking, are still in the early phases of this transaction. We are sending people up there. We are sending products up there. We are planning advertising campaigns together with the San Liam people, in the province and three surrounding provinces. These are huge populations. You know that province alone has almost a 100 million people. We are trying to spread out from there. I cannot quantify for you what we will be doing because the reception of our product is critical. We don't know yet what product will be the most receptive at this point. We can only go by what San Liam has sold in the past and the main plus up there, are products that Emerson itself does not entirely sell in the United States. In other words, we could be running into ... from inaudible peripheral items which Emerson will have to obtain here, sell in China. So we are still in that phase where we are sure that once we have this fully calibrated, this will be very dynamic stuff.

Is Emerson a recognized brand name in, in to China?

Oh, oh that's just, Emerson has never been a recognized band in China, that's why this is such an important breakthrough for us.

Oh I see.

To get into China and we have sold in the past, from time to time products in China to the Wal-Mart stores but Wal-Mart had very few stores in China and still only very few stores here so we didn't make that impact that we can make through people like San Liam.

How big is Sanlynn as a company, I guess I don't know?

It's about a billion and a half. China is big because, I mean the store chain,

Yeah

The company of course is bigger they have other things including an airline and railroad

Oh, ok I was thinking about the consumer.

Just the consumer side of it, let me put it this way, so the concept is for us to help them also source products. So far they have lived by purchasing from Panasonic and Sony and Phillips and ABC and selling it through their stores, very much like US retailers would do. But this is supposed to be a joint venture house branding situation and that makes it interesting for them as well as for us.

Where does San Liam rank as a consumer?

It's the number two electronic chain in China

Oh it is. Oh I didn't know that

But you have to understand about America, ah, about China it's totally different. They don't have these big retail chains that the Americans and some of the Europeans have. Chains here are virtually a recent invention. In places like India you have no chains at all. You have the second largest population and you hardly find a group that has more than three stores so this is all, it's very important that we go into an area where we at least have a couple hundred stores to work with. (indiscernible) so not yet exist. Even Wal-Mart will only have about 35 stores in all of China after the better part six, seven years of working in China.

I see and how many does San Liam have?

About 200

Oh, I see.

This is divided between physical stores, franchise stores and virtual stores.

I see. Alright great, thank you very much

Thank you.

Thank you. Our next question comes from Jeff Ophel (ph) from Alias Capital (ph). Please state your question.

Yes. Hi Geoff how are you?

Ok.

Question for you. The company bought back how many shares in the quarter?

We bought back about 4.1m shares last year.

Last year?

Not in the past quarter, we bought back last (indiscernible)

How much in the quarter?

There were none in the current quarter.

We couldn't buy any in the quarter; we bought these shares last year.

Ok, so that had nothing to do with the sale of 4.2m shares of stock that you registered for?

No. Nothing

What is the procedure? I understand that was supposed to be done according the court as soon as possible, is there any timing yet on the secondary offering of those shares to shareholders?

We, we're going for a full LPT because Emerson has not had a SEC review for many, many years and the SEC is held to my knowledge we review of company every three years. Well the, the secondary was taken as an ideal opportunity to give Emerson a full review and so this was taking several months I mean, they send you a catalogue of 130 questions and you're combing through all of that and in the meantime you're doing your.

We're not familiar with the process, my question becomes now are the Stelling people putting pressure on you to sell those stocks to--- those shares to pay off the lawsuit or what is the process with that that's going on?

(Inaudible) And they're not making a lot of noises but the issue needs to be resolved just like we stated a few months ago.

I presume that's going to be on a timely basis to get the overhang out of the way so we can have a clearer sky above us.

Yes I do believe that it will be done within a month or so

And Ferris Baker and Watts will continue to be the underwriter?

Yes they'll be continue to be the underwriter

Good now we're looking forward to seeing you on the road. Now I see the quarter going forward

Excuse me Jeff, I just want to, before we move on to the next topic, I just want to clarify a point that you made. The court is not directing Mr. Jurick nor putting pressure on Mr. Jurick to register these shares. This is a voluntary registration, and it is intended to facilitate an early placement of shares into the market, and secondly, it's also secondarily, it will provide additional liquidity for the market as well.

No, no, well he probably

I want to clarify that point that no one is under court order, or court direction or pressure to

Right that's true, that's true

Ok, now the current business you said is going to be a down quarter, you said in front of us?

Yes, we're facing a down quarter here which to some extent exactly what we put in our press release mainly that you are dealing with a sluggish economy. You are dealing with a lot of demands by retailers to deliver just in time, which means more domestic shipments. You're dealing with a lot of demands by retailers to deliver just in time, which means more domestic shipments-- lower inventory sales by the retailers. Who are fearing-are not certain of the economy. Obviously a lot of this was impacted partially by the Iraq war also during the time of our quarter. And we didn't exactly have an easy time with that with the sales breakup in Asia either. So we've had to hold back our buyers held back --many of the selections did not take place--that can only take place in March and April here in Asia, the people did not travel here. So we've had a push back, but I'm pretty confident we'll make it up in the course of the year.

Alright.

So I'm not negative at all. It’s just that this quarter has to be seen as a you know deferral quarter.

Now, do you have any intentions of reporting your numbers on a fully tax basis like everyone else does, adjusting to the facts of your NOL’s because the numbers you're reporting are nominal pre-tax?

There was a report Jeff during the quarter. The accounting regulations require that we benefit our fourth quarter with our net tax audits which you see here in the full year results. Then going forward each quarter those results are in fact tax affected, and you saw that during all of fiscal '03 and you should expect to continue to see that during fiscal '04.

So what would the numbers be on say a 38% tax basis?

As they were in each of the quarters in '03, yes.

Okay. And so we'll just deduct 38% we'd get a net after tax numbers?

As I mentioned that we, I don't think it's fair to say a full 38% because Emerson's tax structure is a little more complex to a multinational structure.

Right-

But if we are going to compare an apples to apples with an American fully taxed company we would deduct 38%?

It would be fair to say that, if one were to look at the last year's quarterly results the effective tax rate you saw in there that would be a more appropriate method of recognizing the whole tax impact on the company on a consolidated basis.

Okay, and okay. So I do appreciate it, and look forward to seeing you on the road show.

Okay, very good. Thanks Jeff.

Thank you and the next question comes from Mark Cooper from Benson Associates. Please state your question.

Thank you. What was the cash flow from operations as you would report on your cash flow statements?

I'm sorry could you say that one more time? You cut out on me?

Yeah, cash flow from operations as you would report on your cash flow? Your statement of cash flow what's that number going to be for the year?

On a consolidated basis, the statement of changes in cash flow shows cash provided by operations of $15.5m for the current year as compared to about $10m last year.

$15.5m versus $10m, ok, And then the current shares outstanding are 27m.

That's correct. There's roughly, there's approximately 2m diluted securities outstanding, a little less than, that's primarily associated with employee options.

Thank you Ken.

You bet.

Thank you. Our next question comes from Jim Windle (ph) from Fother (ph)Lane Asset Management.

Hi guys. Ken I wondered if you could give a little more detail about the licensing revenue, how much was inbound, how much was outbound, and what's the over the year the growth and SKUs and in things like the NASCAR and the Mary Kate And Ashley lines were?

On an outbound licensing basis our licensing revenues increased to about $10.3m this year versus $7.4m last year. In the branded products associated with it, increased from about $325m last year to just north of $600m this year. So the shelf space that we're gaining indirectly through these various licensing agreements primarily from our video license agreement with Funi(ph) which covers Televisions and VCR's and DVD's, combo units, flat screen television, the traditional CRT television sets, are all benefiting us in a significant manner. Additionally we have a license agreement in Europe for our H.H. Scott brand name that we saw a 62% increase in product placements.

Behind video, the second largest category you see is our audio products and then our accessories and kitchen appliances. So we're seeing nice growth in last year's outbound licensing agreement both in a licensing fee as well as the product placement in which this additional product placement, it creates a momentum effect because the more shelf space you see through our licensing and though our core product sales, the more retailers and customers pursue the product to the point now we are seeing products marketed on television through direct marketers and various other channels of media.

On an inbound license agreement, basis, this past year Nascar, we did approximately $3m worth of brand and product sales and Mary Kate And Ashley dealt exclusively through Wal-Mart, we did a little more than $7m, we've become recognized in the industry as an organization that is very adept in introducing theme products, and of course our initial and very early success was with the Hello Kitty brand that we have now transitioned out of and are turning our slights to our recently signed licensing agreement with Nickelodeon. And what we additionally established as a one SKU item, we eventually developed or will develop into a full end capped display with several SKUs.

So the goal is to start small and then increase rapidly. With Nickelodeon we expect a much more rapid advancement that we did in our little license agreement. This is because of the fact that there are various factors at work. 1) is the cartoon licensing agreement that we are subject to namely Sponge Bob Square Pants, Jimmy Neutron, and other various characters are number 1, number 2, number 3, as recognition with all children in North America, so we're dealing with a much broader audience, not just with youth girls, not just with youth boys, but with both youth boys and girls, so we see significant potential there.

Number 2, following the launch, those two theme products, Jimmy Neutron and Sponge Bob Square Pants, it's our intent to expand that to other products that the licensing agreement affords us, and we see continued growth after that initial introduction.

Additionally, as children and parents are all aware who have, parents who have young children, the Nickolodeon brand, and the marketing that Nickolodeon does is significant and it's wide spread, not only on television and in print media, but also in the movies, and in those movies, it's a plan to launch this year, this summer, as well as the cartoon television series, there are various placements of product that appear on those advertisements, and it would not be of surprise to anybody to see the Emerson brand of product included in those placements, so we're very optimistic about the benefits of that marketing, and the residual effects and follow through with the sell through on our product lines, so we're very optimistic on the licensing front on an inbound licensing front with the introduction of these new theme products, and it's a very good relationship with the people at Viacom and MTV products who manage the brand names.

So we're very excited about it and we look to launch that product stuff, and we begin delivery in our September quarter.

Okay, thanks.

Thank You Jim.

Thank you, our next question comes from Steve Monty from Sky Capital. Please state you questions.

Morning, I have a couple of questions on the consumer electronics part, and one question on the sports supply part of the business. You covered part of the royalty inbound revenues by pointing out that something like $600m in product was responsible for generating royalties up from $325m the year before. Do you have any feeling for what that number might be in the current fiscal year, or are we likely to see the same kind of trend, and then I'll go on to my next question.

Our feeling is that yes we will see an increase, particularly our major licensee, is getting into new technologies including LCD, plasma and certain additional digital products, which are very well received. We also of course, anxiously working around the globe of additional licensing opportunities, so if the economy holds which we hope it will, we should see a significant increase again in our licensing revenues. Products, which are very well received. We also are of course anxiously working along the globe on additional licensing opportunities. So if the economy holds, which we hope it will we should see a significant increase again in our licensing revenues.

(Overlapping voices)

Could you be a bit more specific, than substantial increase. Are we talking something in the lines of ---- excuse me.

(Overlapping voices)

We're talking about let's say $900m of globally brand sales, between our own sales and Emerson and Scott sales in Europe so I would say----- I would think you can add a couple of hundred million to that.

At about the same royalty rate?

At about the same yes.

Okay, second question in the consumer electronics, with regard to the Nickelodeon. If I recall going back a couple years ago when you in-licensed the Hello Kitty brand name I think you had for a part of the year, you did around $2m in sales and then the first full year you did around $20m. It would seem to me that the Hello Kitty at the time was a relatively unrecognized one cartoon character from Japan.

The Nickelodeon characters Sponge Bob, Jimmy Neutron etc. are probably the most widely recognized characters in the eyes of children and it would seem to me that the potential is there for you to generate more than double the amount of sales generated by Hello Kitty. Am I smoking something funny? Or do you feel that --------

Steve. You're absolutely correct. I-----It is too early to tell because not every popular name works on electronics but this---- our estimation that what you're seeing with Nickelodeon universe could be at least five times of what Hello Kitty used to be and there is no question it should be at least that much if not ten times as much. This is ---- and I'm not really on (inaudible) but Nickelodeon has a backing which is second to none. I mean we have 86m kids a month watching these programs.

This is a global network of TV stations controlled by Viacom. We're right now in the process of talking about Europe and Asia as well. As Ken mentioned earlier Steve these people really like us because of the fact that we did do a lot of things for the relatively unknown Hello Kitty and other things.

They know that we know how to get behind a category and a program of this type. So they're very nice to us and they're willing to give us whatever we need to make it successful and I think we will be very successful. Everybody is extremely excited about this baby.

Can we switch over to sports supply for a moment? In looking at your gross profit margin I believe it was up about one percentage point year to year and I would have thought that it would have been up by a greater amount given the fact that you've sourced more of the merchandise that you're selling from far eastern suppliers as opposed to having it manufactured here in United States.

Since I personally deal with it very closely here in Asia let me tell you that the program kicked in slowly. The idea of sourcing these products has quite enormous discounts without any loss of quality whatsoever is of course correct. However, it takes time. We had to switch over from domestic manufacturing to foreign manufacturing. In some cases the --- this cost of the availability of certain products.

We were not in all cases able to seamlessly move gain tables from Taiwan or China into the States as quickly as we wanted to. We did have a initial, you see, difficulties we needed to put the people in place. So there were some leads and lags, but the genuine benefits of this will definitely show up this year.

When you say genuine benefits are we talking about another one percentage point improvement or something more like on the order of 5% or?

I ---my personal feeling and my goal is about 5%, because we're seeing enormous discounts over here on equal quality products.

Well, will the improvement in your gross profit margin and the control of your operating expenses enable you to get the bottom line into the black?

Yes definitely. I think this is year we're going to do it. We are battling the tail end of the switch over and we're also cognizant of the fact that the school budget have been attached but again we are I think one of the dominant players in the field and I think we will come out on top. And this will be the year where you're going to see the benefits, cause we worked on it for the last two years.

Okay thank you very much.

Thank you Steve.

Thank you. Our next question comes from Michael Durinsky from Vinig Asset Management. Please state your question.

Good morning

Good morning

I'm wondering if you can provide a little bit more color to your revenue outlook for the rest of the year. Do you expect that you'll be able to more than make up for the June drop-off that have year over year increasers? Or how do you see that playing out over the year?

I do believe that we have about six to eight different programs that could be quite dynamic over the next eight months or so. Some of them are very close, some of them are not that certain yet. But I do hope that we can do better this year than we did last year. But again this depends on also some larger arrangements that we're working on like massive shipments to Europe, shipments to Asian countries. We have started to ship ever so slightly into Japan and to Korea. A lot will depend on how we can expand that and how much we can do in the second half in the United States or in the last three quarters in the United States. I'm quite optimistic that we'll do better than this year -last year. I see--- but I cannot tell you exactly where we're to be in a year from now.

Okay also what kind of a currency impact did you guys see this year?

Well basically a weak dollar is not good for Emerson because we're major importers. So obviously a firm dollar is more in our favor. On the other hand with our increased efforts to operate internationally, particularly in Europe where the currencies have strengthened recently, this plays into our hands over there. Our dealings are quite narrowly back-to-back in U.S. dollars, although some components may be quoted in Yen and other currencies. But, the actual dealings are back-to-back in U.S. dollars which doesn't hurt us too much if the dollar slides in the U.S, and it certainly is to our benefit if the dollar rises in Europe and elsewhere-if the currencies rise in Europe and elsewhere.

Okay. Just one final thing, you know based on just how you see things right now even if some of these other programs that you have coming don't quite pan out as you expect, can we expect to at least see you guys treading water compared to today, such that, you know, we could maybe see another 94 cents next year as just a base line of operations?

That would certainly be our minimum ambition, our absolute minimum ambition.

Okay thank you very much.

Thank You

Thank you. Our next question comes from Brik Biankino (ph) from Greg Court(ph) & Financial. Please state your question.

Yeah, you guys, mentioned a couple of relationships with, well, one with Radio Shack, one with Blockbuster. Two questions, when does the Walgreen's relationship commence? And secondly, are there any other relationships on the horizon?

The Walgreen's relationship will be beginning this September, as we anticipate the beginning of September quarter. We've put a significant amount of effort and resources into expanding our sales force, and hiring key players for us, as we've announced some time ago to continue pursuing entry into accounts outside of our core distribution. So we're very optimistic on that front. We have a lot projects that we're working on. You know we would love to have products in Sand (ph) which we don't have a place in right now. We would very much look forward to having products in Price Costco, which do not have right now. So those are some of the efforts that we're looking at, and we continue to have very favorable discussions with. And those are some of the additional avenues we'd like to have our product in, that Mr.Jurick referred to earlier, that we're working on several different initiatives that would give us additional revenue growth coming into fiscal 04.

That's great. Thank you.

Yes, sir.

Just a reminder ladies and gentlemen, if you do have a question, please press star 1. Our next question comes from Richard Wisent (ph) from Atlas Capital.

Hi, you mentioned how revenues for the June quarter would be down versus last year. What were earnings last year for the June quarter and what's your guesstimate on how the June quarter earnings this year may stack up versus that?

Well, June quarter year we did approximately $83m in revenues and our earnings per share after giving effect to the (inaudible) for the goodwill would be a negative 10 cents for June of '02. That being said, we certainly don't expect our net income last year was $2.7m before the write off of our goodwill.

That being said, I think it is important to understand somebody that actually works on these deferrals that are going on. We first saw this in December of 2000 where the buyers at the major retailers really ranged back the working capital, really pushed down very heavily on inventory levels and subsequently, in the March of '01 quarter due to stock outs that underselling and the loss of sale in the December quarter because of under-buying, we've saw a big influx of buyer request come in from the retailers.

We're seeing that - -now we're seeing that delay happen again, we're seeing a mass of push down working capital levels coming back from the retailers. This year, we're not seeing that benefit in the March quarter but certainly now we're seeing it- - I'm sorry , we're not seeing the June quarter but we certainly are receiving a lot of pressure from the retailers now to ramp up inventories because of stock out situations etc. So, we are very confident that the revenues will recover in the September quarter but on the full year - - but for a dollar target, I really don't want to get into that right now and I don't want to look beyond that except to say, as Mr. Jurick iterated earlier, you know, we are very confident that we just are going to continue to have another strong year.

Thank you.

Thank you. If there are no further questions I will turn the conference back to management to conclude.

Okay, if there are no further questions, we thank you very much for your attention and we hope you'll bear with us, we'll be back to you often. Thank you.

Thank you, bye.

Thank you, a rebroadcast of this call will be available approximately one hour from now. To access this rebroadcast, you may dial 1 800 428 6051 or 973 709 2089 with a pass code I.D number of 300666. This rebroadcast will be available until August 14th. Ladies and gentlemen, this concludes the conference for today. Thank you all for participating and have a nice day, all parties may now disconnect.