O2micro International Ltd (OIIM) 2014 Q1 法說會逐字稿

Good morning and thank you for joining us today to discuss O2Micro's financial results for the first quarter of FY14. Today's conference is being recorded.

If you would like a copy of the press release we issued this morning, please call Pamela Campbell at 408-987-5920, extension 8095, and we will fax you a copy immediately. It is also posted on the O2Micro website at www.O2Micro.com under the heading Investors. There will be a replay available through May 7, 2014, at 9 a.m. Pacific Time by calling 1-888-203-1112 or 1-719-457-0820, passcode 1389272.

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

Good morning and thank you for dialing into O2Micro's financial results conference call for the first quarter of 2014 ending March 31, 2014. This is Scott Anderson, Director of Investor Relations.

I'd like to remind listeners that the discussion of business outlook for O2Micro contains forward-looking statements. Statements made in this release that are not historical facts 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 Company's 20-F annual filings, our annual 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 and the associated risk factors. The statements made herein are dated information. The Company assumes no responsibility to provide updates to this information.

With me today are Perry Kuo, our CFO and Director; our Head of Marketing and Sales and Director, Jim Keim; and Sterling Du, O2's founder, CEO, and Chairman. After the prepared remarks from these gentlemen, the floor will be open to your questions.

Now I would like to introduce Perry Kuo, CFO of O2Micro, for a discussion of the financial highlights of the first quarter ending March 31, 2014. Perry?

Thanks, Scott. We will now review our financial results for Q1 2014. Please note that financial results will be presented on a GAAP basis unless we designate otherwise. The non-GAAP results exclude stock-based compensation expense, one-time charges, nonrecurring gains, and losses from discontinued operations. Our full-year results are available in our press release that was issued earlier today.

GAAP revenue in the first quarter of 2014 was $16.5 million. GAAP net loss in the first quarter of 2014 was $2.9 million. If we exclude stock-based compensation of $570,000, the non-GAAP net loss would be $2.3 million. GAAP net loss per ADS in the first quarter of 2014 was $0.10. Non-GAAP net loss per ADS was $0.08. Gross margin was 51.5% in Q1. The gross margin reflects the current revenue gross level and the product mix.

R&D expense was $4.9 million, or 30% of revenue. This amount excludes stock-based compensation expense of $132,000. SG&A expense was $6.1 million, or 37% of revenue. This amount excludes stock-based compensation expense of $538,000.

Income tax was $255,000 in the first quarter, and it's mainly based on the estimated effective tax rate of each taxable location.

In Q1 2014, we repurchased 420,162 ADS units at a cost of $1.4 million. Q1 2014, revenue for end markets break out into the following percentages. Consumer was 45% to 55% of revenue. Computer was 20% to 30% of revenue. Industrial was 20% to 30% of revenue. Communications was less than 5% of revenue.

At this time, I would like to provide some additional information. O2Micro finished the first quarter with $72.1 million in unrestricted cash and short-term investments. This represents cash and cash equivalents of $2.50 per ADS. In addition, O2Micro has no debt.

Accounts receivable at the end of Q1 was $8.1 million. Our DSO is 49 days. It is in our target range of 40 to 50 days. Inventory was $8.2 million at the end of the first quarter. This represents 87 days of inventory, and inventory turnover was 4.2 times in Q1.

From a cash flow perspective, we generated $1.9 million cash outflow from operating activities in Q1. Capital expenditure was about $103,000 in the first quarter for the machinery and equipment. Depreciation and amortization was $1 million in Q1.

At the end of the first quarter of 2014, O2Micro had 475 employees, 55% of which are engineers.

At this time I would like to provide our financial guidance for the second quarter of FY14. This guidance reflects our best estimates for the current environment and is subject to change. This is the only official guidance we will provide unless we update it with a public announcement in the future.

O2Micro expects Q2 revenue to be up 5% to 9% sequentially. We are guiding the Q2 gross margin to be in the range of 50% to 52%. R&D expense, excluding stock-based compensation, should be $5 million to $6 million in Q2. SG&A should be $6 million to $7 million in Q2, excluding stock-based compensation expense.

Stock-based compensation should be in the range of $550,000 to $650,000 in the second quarter. Based on the service income of our subsidiaries in different countries, we expect our tax amount to be in the range $200,000 to $300,000 in the second quarter.

In summary, our top-line results in the first quarter were at the higher range of the updated guidance that we provided in early March and reflect weakness in our TV and the notebook end markets due to seasonality and the production delays in some general lighting customers.

In Q1, we continued to focus on our ongoing cost-saving measures, and we believe that we have aligned our operating expense structure to more effectively manage our business in the current environment, with the goal to reach a cash breakeven point in 2014. We believe our cash breakeven point is between $20 million to $21 million in quarterly revenue, and our profitability breakeven point is between $23 million to $24 million in quarterly revenue.

Our guidance for the second quarter of 2014 reflects seasonal improvements in our TV and notebook markets and is ongoing ramp in our general lighting and the battery product [mix]. Our goal and the focus for the remainder of 2014 is to grow our core mixed signal business from year-ago levels. Additionally, based on current focus, we do expect for full year 2014, revenue levels will increase in 2014 compared to 2013 levels.

We will continue to invest in our carefully chosen growth drivers -- general lighting, intelligent batteries, intelligent power, and backlighting -- and we remain confident that the innovation and the investments we are making in these product segments, combined with strong design win activities and the market share gains, will lead to consistent growth and a return to profitability in the future.

We are now well underway in our supply chain management review, and we expect to realize additional improvement to our cost structure profile in future quarters. Given the uncertain demand and the macro environment, we are prepared to continue to manage costs as needed, although we believe we have aligned our current cost base around the current and expected revenue levels. We remain very confident in our ability to support current and future capital demands in the program range.

Finally, regarding our share repurchase program, we have been active in this program historically, and we plan to be active going forward. At the end of Q1, we had $16.8 million remaining in our share buyback authorization. Returns to shareholders are very much on our minds and will continue to be a focus in the future.

I would like to thank everyone for participating and turn the call over to Jim Keim to talk more about our business. Jim?

Thank you, Perry. Good morning, everyone. Last quarter we began to share more information, including product sales information related to new products. We will continue that process in this call and expect to further expand the information as we move into the second half of the year, while run rates of our two fastest-growing product lines, general lighting and battery management, should be at significantly higher and more predictable run rates.

We are pleased to inform you that despite the previously announced delays in production at several customers, our general lighting revenues did grow in Q1 versus Q4 of last year. Additionally, we expect to see appreciable growth in Q2 general lighting revenues, as these production issues have been resolved. Based on our current revenue expansion rate, we still expect our general lighting products will reach our goal of 15% of our 2014 total revenue, as stated in January.

We are also pleased to note that our design activity in our proprietary Free Dimming general lighting products accelerated in Q1, as we see interest in our Free Dimming products establish itself in more and more varying applications at a widening international customer base.

The second rapidly growing product area we highlighted in our last call was battery management. Battery management product revenue met our revenue projections in Q1 and is expected to achieve good ongoing growth in Q2. We remain confident that our battery management products will reach our stated goal of 10% of Company revenues in 2014. Our battery management products continue to achieve many new design wins, and we continue to be very optimistic for ongoing growth in power tool, e-bike, and e-vehicle markets. We are also seeing increasing design activity for products in uninterrupted power supply applications.

LED backlighting did experience a lackluster quarter in Q1, and sales of traditional notebook, monitor, and TV were weaker than expected. While Q2 is expected to remain weak in these markets, we are projecting renewed growth in this product area as we move into the second half of the year, based on increasing design activity in TV, tablet, and smartphone markets.

One of our new novel designs for smartphone lighting will ramp into production in Q2 and is expected to boost revenues as this product moves into higher volume in the second half of the year. While power products have lagged due to weak notebook sales, we are proceeding with design activity with our advanced charger family and expect revenue growth in power products to resume later this year as these products continue to expand into new market areas.

Finally, we would mention that the sales of legacy CCFL products were less than 1% of sales in Q1 and are expected to remain below this level going forward.

I will now turn the call over to our CEO, Sterling Du, for closing remarks.

Thanks, Jim. Q1 revenue was in the high range with the updated guidance we provided in late March. We generated revenue of $16.5 million in the first quarter of 2014, a decrease of 14% sequentially and down 5% from year-ago period. The weakness in first-quarter revenue was due to seasonal soft demands in the TV and notebook markets and production delays in some general lighting customers, which are not ongoing concern moving forward.

We reported a GAAP loss of $2.9 million in the first quarter of 2014 compared to a GAAP net loss of $5.1 million in the year-ago period. We reported gross margin of 51.5% in Q1, an increase from the 50.1% gross margin reported in Q4 2013. During this challenging environment, we're still making over 50% gross margin attributed to our proprietary technologies, technical superiority, and as a result of ongoing efforts to streamline our cost structure profile.

I would now like to highlight the considerable progress from our key growth drivers that we expect to drive the next cycle of growth for O2Micro. Our LED general lighting business continued to grow rapidly, based on two key factors. First, the overall replacement light bulb market entering a significant growth phase, and it's becoming well established. As a leader in LED general lighting, we continue to take advantage of available shift to LED lighting and our strategy to use new product innovation such as Free Dimming to drive our growth. The strategy is working, and we are well-positioned to continue growing our business in 2014 as LED adoption increases. Our careful investment in this business unit has produced solid results, and we plan to continue to invest in this area.

Second, we began designing and developing products for the general lighting market in 2009, and we are very early entrants and contributors to this market. Our strategy to engage both worldwide OEMs and ODMs in this market is working, and both type of customers can rely on our innovation and the reliability of O2 products for many years. From successful penetration in Japan and the US markets, we are now engaged with some of the largest LED general lighting manufacturers in the Chinese market. We believe that the industry is in the early innings of an LED lighting revolution, and we are well-positioned as an industrial leader to penetrate into important industry growth.

Our intelligent battery products for power tools, household appliances, and other products are also showing significant growth and developing momentum, which will translate into meaningful revenue in upcoming quarters while gaining share in this market, and we expect to be the market leader for battery management solutions in the near future. Dependent on the type of tools and appliance, we generate between $0.50 to $1.00 of content of gross margin business, while many of the world's top-tier power tool vendors have adopted O2 solutions. We remain focused on product innovation to expand our product offering and to develop safer, more reliable products that extend battery operating efficiency and life.

Next, I'd like to highlight our progress in our goal of targeting smartphone and the tablet PCs. As a reminder, we are focused on not only backlighting solutions for this moment. We are leveraging our power matrix logic, which applied to notebook PC, now to tablet PC and smartphones, in which mostly are one-battery-cell applications.

Similar to last quarter, we saw a meaningful number of recent developments, new startup ramps, and significant market share gains in the quarter. I'm very pleased with the progress we have been projecting in many of our long-term growth drivers, including general lighting, backlighting, and intelligent battery power.

In closing, we are excited about our demonstrated success across all core power management product lines, including general lighting, backlighting, and intelligent batteries.

At this time, I'd like to thank you for listening to our conference call, and I'll turn it back to Scott. Scott, please.

Thank you, Sterling. Operator, at this point we'd like to open the call to questions.

Thank you. (Operator Instructions). Tore Svanberg, Stifel.

This is Evan Wang calling in for Tore. I would like just to follow up on some of your descriptions of new products and ramps. Could you give us a sense of how big a revenue opportunity the smartphone backlighting, or the smartphone design wins are at this time?

Well, we certainly do expect to see some high volume as we move into the second half of the year. We're already ramping into that. Due to the proprietary nature of both the product and one of the key applications it's going into, we're not going to say much more, except we do expect to see high volume.

Okay, that's no problem. Can you also talk a little bit about the LED backlighting into notebook monitors and TVs? And I understand that your comment was that the second quarter could still be a little weak, but that the growth should resume in the second half or should renew. Could you talk to us a little bit about how much headwind you're seeing in that right now for the second quarter?

Well, we're still seeing a lot of market uncertainty as we move into the second quarter. Certainly, TVs are a reflection in many cases of things like starts in homes or condominiums, and we're still seeing a very weak market around the world, including China at this point, which has impacted the overall TV market.

We believe that the market has bottomed. We are hearing that there may be some upside from some of the reports we've listened to. But nevertheless, at this point we want to remain conservative in our view. As we move into the second half of the year, we would expect there to be some traditional increase in the market, as there has historically been. That's my comment.

Okay. Okay, that's good color. About your gross margin this last quarter, you had a nice gain, nice expansion in your gross margin. Could you tell us a little bit about which is still, probably at this point, the more important driver? Would it be mix or revenue level? And what might gross margin look like for the rest of the year?

Yes. I think for the Q4 to Q1, we experienced some new product ramps. And in Q1 we improved the year rate, which actually benefited our gross margin. And secondarily, we have a better product mix in several product sectors including general lighting. We shipped more of (inaudible) in product which enjoy high gross margin. In view of the top line for Q1 and Q4, they are on the same level. Top lines do not contribute much on the gross margin into (inaudible) in this area.

In the second half of this year, we continue to improve the revenue. We do improve some gross margins through the (inaudible) increase. Also, I think we will continue to reduce our costs and also improve our cost structure. We hope that we can improve in the high range of the 50% to 52% range.

Okay, okay, that's great. And my last question here is regarding your revenue outlook, and you mentioned again that you're still positive on growth in 2014. Given your second quarter guidance, it looks like there need to be a lot of growth in the second half. Am I reading that correctly?

Yes, you are right.

Okay. Is it mainly those two large drivers that you spoke of that will be responsible for the second half growth, meaning LED and battery management --- I mean generalizing?

Yes, we expect that in LED, not only the general lighting to show better results, but also we would expect that the TV market in particular would be better, and some of our new design win areas, like we mentioned in smartphone, will also help that number. Battery management product, we do expect to continue to ramp throughout the year, quarter to quarter.

And so typically, the December quarter is weak. So are you looking at significant growth, even above Q2 growth, in Q3?

At this point, Q4 is out there a ways. But nevertheless, with our product mix, including some of the battery management, which is more focused in the industrial area, we do expect ongoing growth in Q4.

Okay. Well, thank you very much.

Vernon Essi, Needham and Company.

Thank you. Not much left here to ask, but I just want to revisit the prior line of questioning there in the back half of the year, just so I'm clear here, Jim. Are we talking about visibility on more the power tool side in battery management, or is this related to what sounds like a pretty material smartphone ramp?

Well, first of all, we are confident in the battery management area because we are seeing a number of very good design wins. And as we move into new programs, we expect the revenue to continue to ramp due to those design wins. At the same time, we would expect, obviously, where we have design wins in areas like smartphone, where we know that production will ramp into higher volume in the second half, that will help generate additional revenue.

But let me back up a step. First of all, the power tool stuff is put into your industrial bucket. Is that correct in your revenue segmentation?

Yes.

Okay, so that's been growing nicely, so you're getting some good traction there in incremental design wins. When you're talking about battery management, I want to be clear, though, that in terms of the second half of the year, what you're looking at is mostly on that side of things, the industrial side, not smartphones.

Yes.

Okay.

That is right.

Okay, so then let me try to isolate the smartphone side of the business. It sounds like it's more on the display side than of the design win that you have. Can you characterize the sizing of this relative to other wins that you've had in the past? Or is this just another -- what kind of profile of customer are we talking about here? Is this more of a Tier 1 player, or is it more along the lines of an OEM brand that may not be very visible?

Let me comment. You talk about a -- you're asking for the smartphone, right? Or power tool?

Yes.

Telephone, right? So yes, it's one of the top-tier customers, yes.

Okay. And so if I may ask, then, the timing of this looks to be more of a Q3 event, then, given what you've discussed with your guidance. Like you will not see any revenue in the second quarter from this; this would be in the third quarter?

We will see limited revenue in Q2 as ramp begins, and we'd expect high volume revenue in Q3.

Okay. And let me just completely switch gears on another point that you made, which I think is interesting. You've said in the current quarter, only 1% of your revenue, it's basically no revenue left in the traditional CCFL business. Can you give us a benchmark of what that might have looked like maybe two years ago? Because that's when your revenue started to reverse into negative territory on a growth rate basis. I'm just trying to gauge how much of that revenue over the last two years was in CCFL versus trying to build up other things in the backdrop. It doesn't have to be an accurate number, just a guesstimate of where that might have been.

I don't have the numbers here. I don't think anyone does. But Vern, it really began to roll off very quickly toward the end of the 2012 timeframe and throughout 2013. So probably in the 2012 timeframe, we were looking quarter to quarter, I would say, well over 10%.

10% of -- I'm sorry, 10% of revenue was CCFL?

Well over 10% of total revenues.

Okay. That's helpful.

And that's a very gross approximation. We don't have the numbers here.

All right, that's all. Thanks a lot, guys.

Tom Sepenzis, Northland Capital Markets.

I apologize, but I missed the breakdown between the products that you gave on the call. Could you run through that again?

Are you talking about revenue breakout?

Yes, sir.

Consumer was 45% to 55%.

And then computer was 20% to 30% of revenue, industrial was 20% to 30%, and communications was less than 5% of revenue.

Good. Thank you. And can you talk a little bit -- the display driver issues in the first quarter and going into the second quarter -- is that all just market weakness? I mean, we've seen from a number of other players in that space that televisions are picking up, and the move to 4K2K screens is actually helping them here in March and going into June. So is there a market share issue there that will be addressed once you start entering the smartphone and tablet space a little bit more aggressively? Or is it just weakness with your customers? How should we be looking at that?

Yes, let's go back briefly to what we said last quarter. Because one comment we made last quarter was that there was some inventory build in the Q4, going into the Q1 timeframe. So with the anticipation on the part of some manufacturers going into Chinese New Year, there was inventory build in Q4 to carry into Q1. There were pre-shipments, and then Q1 ended up being somewhat disappointing to some of the TV manufacturers. So that resulted in certainly less sales in the Q1 timeframe for the TV market. Additionally, the monitor market, as well as the notebook markets, were certainly soft in Q1. I don't know if that answers your question.

Great, thank you. Yes, no, that's very helpful.

Yes, Tom, this is Sterling. Let me clarify one thing. We are not doing the display driver, but we do the backlighting for LED driver. So you saw some players that benefited from 4K2K, but for us, no matter the 4K2K, they're still using the same LED backlight driver there.

The same products, okay. So do you expect to see greater competition in that space as we go through the next year or two? And additionally, maybe some pressure on the ASPs? Or are there less people getting involved in that now?

Well, the nature of this business is very high volume with very good reliability, quality products. We've been in this business for more than 10 years, and we engage with all the top tier. We never have provided anything -- we provide all the very good products and the quality, and historical, our quality control is really valued to the people that use our ICs.

Although the backlighting driver does have a competitor, as the customer base continues to consolidate, you can see monitor right now, the number-one monitor, TVP probably on the market, is one of the major markets for all the monitors. So when a customer number consolidate to very few, so the supplier, it's going to be limited to certain very reputable suppliers that in this case, providing backlighting driver for the LED driver, or just one of them.

So not just because you have, probably have a new player, then easy to see that has entered to this market. The entry barrier is more like on the high volume production and good quality.

Great, thank you. And then last question, you had mentioned this new novel backlighting product coming in, in the second half of the year. Can you give us a better idea of what is novel about it, what the advantages are, and why you would expect to see, outside of obvious customer wins, but why will that drive the growth in terms of -- I don't know. I'm just trying to get a better idea of what is novel about this new product.

As Sterling said, it's a Tier 1 customer, and it is a novel design. It's something that we have worked on with them, although we can take this technology into other customers, other markets as well. But we're not going to, at this point, divulge the nature of what is novel about it. But it is a novel design.

Okay, all right. Thank you very much.

All right, sorry.

That's okay.

(Operator Instructions.) Andrew Huang, Sterne, Agee.

I guess the first question is when you look at the revenue guidance of up 5% to 9% sequential, what are you assuming happens to your backlighting business?

The backlighting business for Q2, we think, will remain very flat in this Q2 timeframe. That's our focus.

So that means that all the growth is coming from general lighting and battery management? Is that right?

Yes.

Okay, got it. And I apologize if someone asked this, but for the general lighting, this is the probably third time this earnings season where I heard about project delays. So I'm wondering, is everybody selling to the same OEM, or is there just some kind of weird trend where everybody had some kind of a hiccough in Q1?

Basically, there are a lot of hiccoughs. The market, as we indicated before, was quite fragmented. And frankly, what we have seen in some areas is some OEMs have multiple ODMs that are involved. And sometimes they move from ODM to ODM. In our particular case, what caused the hiccough was very simply, they were moving to our product, and our product is somewhat different in nature than others, as is typically the case. And there were some issues relative to board layout that had to be resolved. Those issues are now resolved, and the production is ongoing.

So does this mean that for that particular example, that you basically displaced someone else that had been in there before?

Yes.

Okay. I think, for the Q1 gross margin improvement on a sequential basis, you talked a little bit about yield improvement. If you take out the mix, would you expect to see more benefit from that in Q2? In other words, did you get maybe partial benefit of that in Q1, and will you get full benefit of that in Q2?

In Q2, I think we probably can get some incremental benefit from this. But Q3 and Q4, I expect more benefit from the top line increase.

Okay, got it. Okay. And when I look at your overall gross margin of 51.5%, can you just give us a feel for -- I just want to know, if you could give comment on whether for each of those segments, if the gross margin is above or below the corporate average. So, for example, for backlighting, would you say it's below the corporate average or in line?

In light, higher.

Higher, okay.

The light's higher. General lighting is above, power is a little bit close to corporate average, and battery's up there.

Okay, but something has to be lower, then, if you have a couple that are higher, right?

Power. Power.

Oh, power. Okay, thank you.

And general lighting is close.

Okay. And then you talked a little bit about this new cell phone win. And I think historically, this is a market that, for whatever reason, you've never really focused on. Is there any reason why this is coming up as something new now?

Well, Andrew, because the product is still under the NDA, and we are not, really, can make any comments for that. But that's -- yes.

It's a big market, right? So it's logical for us to go after it.

Right. But that raises my question exactly, which is why are you just happening to go after the cell phone market now, after -- you know, I've been following you guys for a few years, and I feel like this is the first time where you're starting to get into this market. So has something changed within the Company?

So Andrew, the cell phone combination is an extension from the notebook. We just have tried to get to some good window of opportunity and could we leverage our technology, and then commanding a good margin. So that's how we get in. We were working on and tried to get into this market for a while. Just doesn't want to go there just as a me-too, yes.

Okay, great. Okay, thank you very much.

(Operator Instructions.) Lisa Thompson, Zacks.

I was wondering if you could just talk a little bit more about the LED business and the Free Dimming products. How important is that to you, and is there some unique features that you folks have versus the competition?

Well, the Free Dimming is part of our general lighting product line. And basically, that is very important to us because we have significant patent positions in those areas, from two-step, three-step, continuous lighting. And in past calls, we have mentioned those patent positions. Perhaps we should reiterate that again in future calls. It's a very good point.

And basically, what this technology does, it enables you to set your own dimming levels without going to a different type of fixture. You can basically, in the case of the light bulb, for instance, put the light bulb into a fixture and set it at the level you want without making modifications in the electric circuitry that's involved.

And this is a very novel design for us, and it has taken some time for manufacturers, both ODMs and OEMs, to understand. But now we see a good variety of these designs going forward, including industrial-type applications, including various types of bulbs as well as tubes.

So we're very pleased to see quite an evolving number of designs going forward in Free Dimming. And because we do have patents in this area, it will give us added strength as we go forward, which obviously reflects itself in margins and in profitability. So I'm glad you asked the question. It's a very important product area for us.

And just curious -- if I was going shopping, where would I buy something that has your products in it? Who's got it? What products would I find it in?

For you, it may be difficult. Actually, the United States is one of the slower areas to pick up. But we have seen the design activities now accelerate, and that includes Japan as well as China and, most recently, Korea. So we are beginning now from that to see the interest pick up in the United States.

And at this point, the easiest way to get one is probably buy one from a Japanese manufacturer or at some point -- you see our people sometimes -- we take them around and give them out so you can try them out. But we are working with companies in the United States as well as Europe. Now there is a growing interest on the part of OEMs in this product. We can't tell you exactly where; we're under NDA in some cases. But there is a rapidly growing interest, and there is also some interest at retail level in this product. So basically, we do see the market accelerating, and we're very, very pleased with the results that we've seen in Q1.

All right, keep us posted.

Will do. Thank you.

And with no further questions in queue, I'd like to turn the call back over to Scott for any closing remarks at this time.

Thank you all for your attention this morning. Please feel free to contact me at area code 408-987-5920, extension 8888, with any follow-up questions you may have. So have a good day, and thank you again for your attention. Goodbye.

Thank you, and that does conclude our conference. A replay will be available until 9 a.m. Pacific Time on May 7, 2014, by calling 1-888-203-1112, or 1-719-457-0820 and entering the passcode 1389272. Thank you for your participation. Have a wonderful afternoon.