O2micro International Ltd (OIIM) 2006 Q4 法說會逐字稿

Good day, and thank you, for joining used it to discuss O2Micro earning for the fourth quarter and year end fiscal 2006. If you would like a copy of the press release, please call Pamela Campbell at 408-987-5920 at extension 8095, and we will fax you a copy immediately. It is also posted on O2Micro's website at www.expectO2Micro.com. There will be a replay available through February 7th by calling 1-888-203-1112 or internationally at 1-719-457-0820, with the pass code of 6558954.

Following the presentation by management, the conference will be open for questions and answers as time permits. Gentlemen, you may begin.

Thank you, and good afternoon, and welcome to the O2Micro earnings report conference call for Q4 of fiscal 2006 and fiscal year 2006, ending December 31, 2006. This is Mitchell Benus, Director of Investor Relations.

I would like to remind listeners that this discussion of business outlook for O2Micro contains forward-looking statements. Statements made in this release that are not historical fact are forward-looking statements within the meaning of the federal securities laws. Actual results may differ materially due to numerous risk factors. Such risk factors are enumerated in the form F-1, form F-3, and 20-F reports and other documents filed with the SEC from time to time.

Listeners are referred to the O2Micro earnings press release and the documents filed with the SEC to understand these forward-looking statements on the associated risk factors. The statements made herein are dated information. The company assumes no responsibility for to provide updates to this information. With us on today's conference call are: Perry Kuo, CFO, Jim Keim, Director, and Sterling Du, CEO and Chairman.

After the report, the floor will be open for questions, as time permits.

Perry Kuo, the CFO of O2Micro, will highlight operating results and projects followed by Jim Keim, who will provide market highlights, and closing comments will be made by Sterling Du, CEO and Chairman of O2, after which we will answer questions. Now I would like to introduce Perry Kuo, CFO of O2Micro, for a discussion of the revenue, income and financial highlights of the fourth quarter of fiscal 2006 and fiscal year 2006 ended December 31st, 2006. Perry?

Thank you, Mitch. And good afternoon, everyone. This is O2Micro's earnings report for Q4 2006, ended December 31, 2006. As everyone has a copy of the earnings report, I'll be brief and report the highlights.

Revenue for Q4 was $36.315 million. This represents an increase of 15.4% from the preceding quarter, and an increase of 27% from the compatible quarter of the prior year.

Revenue growth. Revenue grew 18.3% from the preceding quarter -- the year. For the -- for the proceeding year. $105.552million in the year 2005 to $424.915 million in 2006.

Net income for Q4 was $1.674 million compared to $515,000 from the proceeding quarter. Net income for the comparable quarter of the prior year was $226,000. Earning per ADS fully diluted for Q4 ended December 31, 2006, were $0.04 per ADS, compared to $0.01 per ADS for the proceeding quarter and $0.01 per ADS for the comparable quarter of the prior year.

Gross profit margins for Q4 was 53.9% compared to Q3, 53.3%. R&D spent including stock-based compensation charge of $246,000 for Q4 was $8.499 million or 23.4% of revenue. SG&A spent including compensation charge of $312,000 for Q4 was $8.261 million or $22.7% of revenues, not including the [inaudible] expense of $2.102 million. The total SG&A spent including the [inaudible] compensation charge was $10.665 million or 29.4% of revenue.

Income tax benefit for Q4 was $432,000. It was -- this was to the income tax accrual of $267,000 offset by the reversal of $585,000 income tax accrual. [inaudible] no dividend distribution in subsidiary. And the $69,000 due to the [inaudible] tax free certificate for our office in China. No share repurchases in Q4.

In the year 2006, a total of 1,168,949.88 had been repurchased, which is 3.06% of shares outstanding. Revenue by end market as a percentage of total revenue for Q4 was consumer in the ratio of the low 50% range.

Computer in the range of low 40% range, in the computer and communications range is multisingle digit percentage of revenue. O2Micro has over $65 million in cash and investments. This represented cash and equivalents per ADS share of $1.71.

In addition, O2Micro has developed investment in [inaudible] certain developed countries. Total expenditure in Q4 was $1,243,000. Total depreciation expense in Q4 was $1.338 million. Year 2006, the Capex was $23.367 million.

Accounts receivable at then of Q4 was $18.987 million for a DSO of 46 days. The ratio for Q4 was 4.5% compared to 3.9% for the previous quarter and the 3.2% for the compatible quarter of the prior year. Operations for Q4 was passive. Cash flow for operations for Q4 mount was passive, was $6.479 million, operating cash flow for 2006 was passive, $3.278 million.

O2Micro has 1,002 employees. 61% of which are engineers. This is needed for new product development. To continue the introduction of new product and the more customer design wins in the future.

In 2006, our head count increased internationally by a total of 357, increasing by an additional 173. O2Micro [inaudible] revenue compared to 2004 was down in the ratio of 2% to 8%. Compared to the comparable quarter of the prior year, it represents an increase in the range of 15% to 20%. Gross margins in Q1 were in the range from 15% to 55%, mainly based on the product mix. Q1 will be in 22% to 24%.

SG&A in Q1 expected to be in the range of 20% to 23%. And operation expense in Q1 to be in the range of $3.1 million to $4.1 million.

Stock compensation. We expect that stock compensation for Q1 should be in from $600,000 to $700,000. A range of 12% to 40% of pro forma income will be $200,000 to $350,000.

EBITDA in Q1 will be in $1 million to $2 million. I will now pass the call to Jim Keim, Director.

Thank you, Perry. Last quarter, we stated that we saw our core markets being positioned for additional growth in Q4 and onward into 2007.

We also stated that our expanding R&D efforts with ongoing intellectual property expansion will lead to a more broadly based portfolio of products. Our Q4 growth of 15% over the prior quarter reflects both the core market growth and expansion revenue from new products.

Let me address both the markets and product expansion.

First the markets. We believe the market grew approximately 7% in Q4 over Q3. In addition to market growth, our design wins in new power and e-commerce products allowed us to gain market share.

While the notebook market is expected to be down in Q1 due to seasonality, our ongoing design win should result in good revenue increases in 2007, as notebook sales are expected to grow by 22% over 2006. The LCD backlighting market accelerated in Q4, driven primarily by TV. Where LCD TV shipments are now believed to be approximately 25% of total TV market shipment.

While Q1 may suffer some decline in LCD backlighting due to seasonality in Chinese New Year, we expect 2007 to show another year of significant growth for LCD backlighting, driven by large growth in LCD TV. Overall, the ongoing growth of our core markets in 2007, coupled with accelerating new product introductions, should result in another year of excellent growth for O2Micro.

I will also comment briefly on our major product lines. Intelligent Lighting continues to expand with new product design wins in all key markets and an expanding customer base. Besides LCD display, O2Micro has developed a family of high efficiency LED controllers that are patent pending. These products are now shipping in high volume from numerous portable applications.

Intelligent Power. Our system DC-to-DC products continue to win new notebook designs with increasing market penetration. Our processor DC-to-DC products now have major design wins, and we expect increasing revenue in 2007.

Additionally, we continue to rapidly broaden our Power product offering, including additions to our patented cool charge family of products. As a product offering continues to broaden, we expect increasing revenues from notebooks, as well as other markets.

Intelligent e-commerce has achieved significant increases in revenue following design wins and a number of industry-leading notebook OEMs. We continue to expand with new and cost-effective products. Our Intelligent Battery product offering incorporates innovative, intellectual property to more accurately control charging and discharging of batteries. This is essential in critical applications where safety and accuracy are required.

We have mobile design wins in mobile market areas and expect ongoing increases in revenue contribution as we move through 2007.

Our VPN security products have now established credible positions in key market areas. We expect to see good revenue growth in expanding market areas as we move forward in 2007.

To summarize, we see ongoing growth opportunities in all our key markets in 2007. Additionally, we expect new products to enable us to expand both our market focus and customer base. I will now pass the call on to Sterling Du, CEO and Chairman, for closing remarks.

Thank you, Jim. The company has done record high revenue in fourth quarter 2006. Our fourth quarter 2006 finished with revenue of $36.31 million. This was an increase of 15.4% from the preceding quarter, and an increase of 27% from the comparable quarter of the prior year.

The earnings per ADS for the fourth quarter 2006 fully diluted were $0.04. Compared to $0.01 for ADS in the preceding quarter and $0.01 per ADS in the comparable quarter of the prior year.

Thanks for the LCD TV market group and our gaining market share in this market, our fourth quarter reached beyond our objective. This is the result of high quality for patent technology and payoff on the patent protection program.

We introduced a whole new LED or in the fourth quarter which further enhanced our product portfolio. On the small to medium sized panel, being the first company to adopt the LED technology, the notebook computer entered into the market in Q2 2007. We are ready for those marketplaces.

In the notebook computer area, our DVDC for microprocessor and DVDC for sales continue to penetrate the market. Our project technology portfolio included a cool charge, which adds a [inaudible] which are in production now.

We continue our leadership in PC products with design wins at more first-class tiered customers. We are steadily gaining revenue as more customers qualify our solutions. Both new products and existing products are expected to grow this year. Our present portfolio grew from $239 million Q3 of '06to $260 million in Q4 of '06. [inaudible]. Thank you for your support. Over to Mitchell.

Ladies and gentlemen, the conference call is open for questions and answers as time permits. Operator, will you please take the first question.

[OPERATOR INSTRUCTIONS] We'll go first to Tore Svanberg with Piper Jaffray.

Yes, good afternoon. A couple of questions. 15% growth is probably above and beyond what most of your peers did this quarter. Could you talk a little bit about your statement about share gains. What types of end markets is this happening in? And how much of that growth perhaps came from new products?

We very definitely gained market share in notebooks, and in two key areas. First of all in Intelligent Power and then also in the e-commerce area. The notebook market did grow this last quarter, as I mentioned, by about 7%. But in fact, in addition to that, we did gain market share in both of those areas due to new design wins that we have achieved over the last few quarters. The LCD TV markets' significant expansion, and we did grow with that market in Q4. And we do expect as we move into next year that LCD TV will continue to accelerate penetration in the marketplace.

Very well, then. And in the lighting area obviously you've had this CCFL for a while, but you're doing much more work in LED and realize an EEFL patent grant here in the quarter. Could you just talk a little bit more about the entire lighting area. What areas are you not covering and is there anything else in the lighting area that we should be looking out for in '07 or '08?

Well, you mentioned LED. Where we are beginning to take significant position, particularly in hand-held products, we are, of course, the world leader in LCD backlighting. As we move forward, we will look into other lighting areas that will include the general and industrial lighting marketplaces.

Very good. And then just on SG&A, I know that was up quite a bit sequentially. How does that trend going forward, especially in light of your test facility, potentially going into production here in the March quarter?

The March quarter, so we start to see to enter the mixed production. [inaudible] So we start to see the decrease of this area in the SG&A area.

So those start expenses were in SG&A last quarter, and now they're moving into cogs in the March quarter, and that's still included in your 53% to 55% gross margin percent guidance?

Yes.

Okay. Very well. Then just last question. It does seem like you started to hit an inflection on a lot of new products. As we look throughout 2007, is there a possibility that some of these product families start generating $1 million, maybe $2 million each?

We are -- we -- it's still a breakdown of each product line. We like to put the order, new product group which is including our new DC-to-DC and our new battery family, and the VPN power solution and we think that could grow three or four times from 2006. That's the total picture we like to share with the investor.

Great. Final question. Inventory days came down significantly in the quarter. They're now at 76 days. Is this a range that you feel comfortable with, or would you perhaps like to have a little bit more?

I think we actually talked about it in the area of inventory in Q4. And Q4 we have a very high inventory trend, up to 4.5. We think that the four is more reasonable for the operation model for us.

Great. Thank you very much. And great quarter.

[OPERATOR INSTRUCTIONS] We'll go next to Quinn Bolton with Needham & Company.

Congratulations on a good quarter. Good one, guys.

Wanted to just come back to the DC-to-DC power for notebook CPU. Sounds like that started to contribute to some nice revenues in the quarter given the strong growth in the notebook market. Can you just talk a little bit more about that product. It sounds like your power in the AM DC CPU is kind of a two-stage solution, delivering up to 40 amps.

Can you just kind of talk about the market how big you think the market for this is, and if you can give us an estimate of what you think your market share is any more color would be helpful.

Our product for DC/DC has two family for this. One is we have a single stage, and we have a two stage. Over our competition, our single stage can have the through-put critical in terms of the driving to the competition's maybe two stage.

And our two-stage equivalent to the three stage of competition turn out to be a driving force. Of course, those are made up of very many different parameters. I'd like to say the driving force strength is our strength -- is our strength. And for the MC-CPU microprocessors, they also have a different flavor. So a customer might either use one stage for O2Micro or two stage for O2Micro. Now as far as we can tell, the MD market share in the notebook microprocessor is trending up.

But we don't have -- we don't have the clearly -- don't know clearly how much MD versus Intel market share is at this moment. And we probably are going to see a pretty dynamic change in the next year -- this year, I'm sorry, 2007.

So we are really happy to see our market position right now. We do have many design wins. And how much is that win is going to realize [inaudible] you the competition in this area. The percentage market share at this moment, it's too early to say. But we believe we are one of the leaders in this marketplace.

Is -- is -- to say that if you look at your double stage to power name DCPU is that a $2 to $3 type product? It seems like it's a significant amount what you might get for a typical backlight inverter for a notebook application.

No. I think it's less than $2.

Okay. Okay. And then just moving into the e-commerce, can you talk about, I think you had started to see a pretty good ramp in e-commerce a quarter or two ago with one major notebook customer. Can you give us a little more color? It sound like you now have multiple customers ramping with the new PC Express customer products. Is that right?

Yes, are you right. We have been providing to a PC Express chip set, which has interfaced with PCI and those have a power switch for PI Express. And we are the leader in this marketplace for this generation. Normally they do CPU.

And after we have the leading notebook computers using our solution and follow many other notebook manufacturers, and also utilizing solutions, that's why you see the revenue for this product group is continuing to go up. And Q3, we like to -- last year we intended to also introduce [inaudible]. And we are going to be seeing some production for Q1 this year. And that is also the new family hand held to add to this portfolio. Not only to secure our leadership, but also we hope by this we can gain more market share.

So for 2007 we think we will optimistic for this product line. Continue to be increasing the revenue. And either is a parenting to our company growth or it's going to be even more active for this -- for the line.

Okay. Just a couple more questions. One for Perry. Perry, what of the rough amount of charges associated with the test facility included in SG&A in the quarter?

The SG&A for the startup?

For the startup.

That's right. It's $477,000.

Okay. And again that will move into cost of goods as you start to move into mass production in the March quarter.

Yes.

Okay. And I think that's it. That's all I've got. Thanks.

Okay.

We'll go next to Bill Lu with Morgan Stanley.

Yes. Hi, there. Good morning. Good afternoon. Nice quarter. A few questions. One is, if I look at your revenue guidance, the range seems to be a little bit broader than it's been the last several quarters. Is that just the -- a matter of maybe less visibility post Chinese New Year, or can you talk a little bit more about that.

Well, there is really two factors in that. I think, first of all, you mentioned Chinese New Year. And indeed that's which during the quarter. It tends to come a little later than it did last year, which could also impact not just late February but early March.

So, first of all, there are some question marks regarding Chinese New Year. There's also some question regarding the general economic conditions that there may be some softening. So, I think it's a little bit too early in the quarter to give a firm projection.

Okay. So if I look at your current guidance, I mean I guess expectation is you think there's going to be some kind of dropoff post Chinese new year, but the magnitude is undetermined right now. Is that the assumption?

Yes.

Okay. And Jim, I think you had said earlier -- well, yes, I was a little bit surprised that PC's are now over 40% of total sales each though you said that LCD TV's account for most lighting products. So is the right assumption that the increase in the PC sales is mostly coming from the new products?

Yes, it is coming mostly from new products, and those are new products in Intelligent Power, e-commerce, as well as a new product that we have in the inverter area, as well.

Okay. Great. A question on the expense side. Obviously, you've got quite a few new initiatives. And I think having spent to support that would be perfectly reasonable. But I want to figure out if I look at the SG&A expenses, some of the cost is going to go away. But as you ramp some the new products, should I assume that the current level is enough to support that or what would be the right level going forward?

Well, I think it's the level of next year we figure our SG&A is key, the model is 13% to 18%.

Okay. But is that with revenue going up or expenses going down?

Yes.

Both.

Yes. Yes.

Okay. Great. Thank you. And last question for me. I think on the last call you had said that legal expenses, in '07 will be the same as it was, or roughly the same as it was in '06. Is that still the guidance?

We don't give out the -- on the conference call, we don't give out any of our intention. We do the early update for the intention. Since we have the -- some pushout from the Q4, we have lower $2 million for Q4, we expect this quarter will pick up some activity for coming to trial in April, which is very important for the education program. So we expect to have some picks in the Q1-Q2 timeframe for the year 2007.

Great. Thank you very much.

We'll go next to Craig Berger with Wedbush.

Good afternoon. Thanks for answering my question. Wanted to dig into the ramp in this Intelligent e-commerce product a little bit. You guys just said that one of the major notebook makers has been taking it over the last few quarters, been driving a lot of revenue growth. Has that product fully penetrated that customer, or is there additional product penetration to drive growth of that customer in Q1 and beyond?

Well, first of all, let me say that we are shipping in high volume to more than one customer. And at virtually every major OEM customer that we are shipping to, there's more room for penetration. We do not have 100% of the business at any of those. But we have been growing penetration at all of them.

Okay. And can you help me just understand kind of what the content is. Is that roughly $2 per notebook?

Yes. That's a determinable area.

Okay. And can you discuss with respect to the gross margins, obviously, they're down fairly meaningfully year-on-year. I think part of that is this richer mix to Intelligent e-commerce. But can you just help us understand how you think that trends generically over the course of the year and maybe how much improvement could be seen.

It's reported earlier that we continue to improve our new product launch in the first half of last year. And we continue to improve it, and we expect to continue to improve it by our in-house [indiscernible].

So in the first half, in the first stage of the mixed production, our gross margin could be impacted by the .5% to 1% with the initial mixed production of the [indiscernible]. However, when the Q3, starting in Q3, we expect to have the full capacity of the testing house. And we expect to again .5% to 1% in the gross margin area.

So we expect in the second half of this year, our gross margin will move to the financial model, which is 55% to 60% area based on the product mix.

Got it. Can you give us an update on -- on the VPN product for 2007.

The VPN final product, we established extensive channel, Asia base, second half of last year. So in 2007, we began to fully utilize the channel we established and tried to approach the enterprise in establishing customers in Asia base. Primarily in Taiwan and China. That's the initial marketplace we'd like to compete.

And the 27, at this moment, everything is on the [indiscernible]. And we believe we can grow our revenue for last year at least three times or four times. It's too early to see the visibility because this also depends on how much result and how much expansion of this existing customer and then expand to other area.

So this is something we -- too early to say, but we have a -- our confidence back, and we'll be going to trend up [indiscernible].

And is that in the communication line item?

Yes. It is.

I know you guys have talked about $10 million for that product in '07. Should we still be thinking about something of that magnitude, or maybe a little more conservative at this point?

No. Not covering [indiscernible]. The overview for the and you pointed out the firewall, you pointed out the DC/DC and gauge.

Got it. Okay. One last question, and then I'm going to go away. If I look at the consumer line, basically it's up somewhere in the 15% range for 2006. 15%. Yet the LCD TV market grew a lot more than that. I think the monitor market grew better than that. Is it a pricing issue that would drive the disparity between the revenue growth and consumer and those end products?

Well, first of all, let me say that in some of those markets, that is true. There has been price competition, price attrition in some of the markets that has had some effect in that area.

Okay. Thank a lot.

We'll go next to Tore Svanberg with Piper Jaffray.

Yes, I just had two followups. First of all, looking at your e-commerce product line and the launch of Vista. Can you maybe explain a little bit how that launch impacts your business.

Tore, could you repeat it again?

Yes. I'm wondering how the launch of the Microsoft Vista operating system impacts your business.

Oh, with e-commerce our power is not a direct link to the Vista operating system, we are highly able --. But however, the interact with Vista is a successful launch, and we got benefit.

I guess I'm just trying to understand a little bit better how it would benefit just looking especially at the interface chips that you delivered to the notebook.

The chip with the solution or the chips we delivered to notebooks, not only for the Vista. So the general Vista system going to be penetrating the marketplace, and we got a benefit. That's why I decided to express.

Okay. And then if we look at the battery management product line, obviously there's been a lot of issues with batteries in the consumer markets in '06. Have you seen maybe some renewal of interest of new designs in that market since then?

Yes.

Can you maybe add some color on some of the things that you could potentially be working on.

Well, basically I had earlier indicated that we are very much focused on accuracy, discharge rates, and other areas that can influence the overall safety of batteries and battery packs. And that is an area that is of very much concern as you expressed in some of these markets. So we think it's an excellent opportunity for us at many major customers to enter the market.

All right. That's it. Thank you very much.

And we'll go next to Bill Lu with Morgan Stanley.

Yes. Hi, just one quick followup, kind of related to Tore's question. Vista just got introduced, and there's this feature called Sideshow. I'm wondering if you saw anything into that. It seems somewhat similar to AudioDJ that you had before. And what the opportunity is there or whether there's any IP or patent issues there.

Bill, we are not familiar with the company or property. Probably we should take a look first.

This is a display outside of the laptop that can be powered up to, say, play music, or look at e-mails or calendars when the computer's not on.

Yes. I think we need to take a look before we answer.

Okay, great, thank you. Sure.

And we'll go next to Quinn Bolton with Needham & Company.

If I've got my numbers right, it looks like your notebook business or computing business grew approximately $3 million quarter to quarter. Does that sound about right?

Our computer? Yes.

You were about 40% of sales last quarter, low 40% this quarter.

Yes.

What I'm trying to figure out is you mentioned that that growth was one overall market growth, but, too, you gained share in two product areas. You know, the DC-to-DC stuff sound like it's just starting to ramp up. I'm trying to get a sense was most of the market share growth on e-commerce side or are you getting meaningful dollars from the DC-to-DC product line? I mean, is the DC-to-DC in the range of $1 million or $2 million year to date or today?

Yes. Yes.

It is?

Yes.

Okay. Thank you.

And we'll go next to David Wu with Global Crown Capital.

Hi. Thank you for taking my question. This is Han Li for David Wu. I just have one quick question regarding to your LCD backlight unit, are you seeing -- what's your response to the LED backlight stuff? And I have a followup, please.

You mean, the LED backlight?

Yes.

We already have a lot of activity, and also we have revenue from it, the LED side now already. And primary from hand held. As I state, we believe that Q2 probably is going to be LED-like notebook, and we already see in the market.

Okay. And my followup is in regard to the SG&A guidance you gave just now. You said that in the second half, your SG&A would be back to the 13% to 18% of revenue.

Yes.

And that's assuming both the revenue going up and the expense going down simultaneously.

Yes.

And what gives you the -- so, which one of the components will weigh in more in terms of the decline?

I think we have expended our supply chains in China and also set u the infrastructure structure for the major visibility in China, covering the key activities China. So the future growth of the SG&A in terms of dollar amount will grow much slower than the last year. And further, we expect that we will have a stronger sales growth in 2007 compared to 2006. So I think that this is equal, and I expect that we will have a synergy effect.

Okay. Just really quick followup. Then for the LCD backlighting units, are you shipping into the major tier-one TV OEMs, or the tier two or tier three guys?

That's a mixed question. Basically our product ends up in tier one systems, but many times, those are built by subcontractors that they have.

Okay. Congratulations on a good quarter and thank you very much for taking my questions.

Okay.

Okay, we've got a question from Craig Berger with Wedbush. Mr. Berger, your line's open.

Hi, sorry. Just one quick followup on patent litigation. I know you guys provided Q1 guidance, 3.1 to 4.1. What general range should we expect for the year in total?

For the year in total, we don't comment on the year.

Okay. All right. Thank you.

[OPERATOR INSTRUCTIONS] We'll go next to Patrick Lin with Primarius Capital.

Hi. Great quarter. And I just have a quick question here for you. It seems like you guys are doing quite well both on the revenue front as well as expense controls. And I'm wondering in terms of getting the story out to more investors, particularly in the U.S. side, do you have plans currently in the next, let's call it, one to two quarters as far as being in the U.S. for either investor meetings and/or conferences?

Yes. Patrick, this is Mitch. We definitely will be attending several conferences in the United States.

Next week will be at Piper's Analog Summit. We'll be at the Morgan Stanley Tek conference. We'll be going to Piper's Technology Conference later in the quarter in New York. We'll also be doing internationally, going to Piper's China Summit in Beijing. We'll also be doing our normal road trip south to meet investors throughout the U.S.

Great. Thank you very much, and congratulations, again, on the quarter.

Ladies and gentlemen, we have no further questions in the queue. And this will conclude today's conference. There will be a replay available through February 7th by calling 1-888-203-1112, or 1-719-457-0820, with the pass code of 6558954. This will conclude today's discussion. We do appreciate everyone's participation, and you may disconnect your phone lines at this time.