Peraso Inc (PRSO) 2006 Q1 法說會逐字稿

Good day, Ladies and Gentlemen. And welcome to the first quarter, 2006, Monolithic Sys Technology's Earnings Conference Call. My name is Alexis and I will be your coordinator for today. [ OPERATOR INSTRUCTIONS ] As a reminder, this conference is recorded for replay purposes. I'd now like to turn the presentation over to Ms. Beverly Twing of Shelton Group Investor Relations. You may proceed, ma'am.

Thank you, Alexis. By now, everyone should have received the press release. However, if you haven't, it's available at MoSys website at www.MoSys.com.

Before we begin the discussion of the first quarter's results, I'd like to remind you this conference call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which includes without limitation, statements about the market for the MoSys technologies, benefits and performance expected from the use of 1T-SRAM technologies and embedded memory designs, licensees of 1T-SRAM technology and their strategy, the development and production of products that use MoSys' license technologies and license fees and royalties attributed to 1 1T-SRAM technologies, and the Company's anticipated or perspective financial performance. Forward-looking statements made during the call are subject to risks and uncertainties that could cause actual results to different materially from those projected. Additional information concerning factors that could cause actual results to differ materially from any forward-looking statements made during this call are contained in the Company's most recent and annual report on Form 10-K filed with the Securities and Exchange Commission. In particular, in the section titled risk factors in the Form 10-K and other reports that the Company files from time to time with the Securities and Exchange Commission. MoSys undertakes no obligation to publicly update any forward-looking statements for any reason except as required by law, even if new information becomes available or other events occur in the future.

Thank you for your attention, I'll now turn the call over to Chet Silvestri, Chief Executive Officer of MoSys.

Thank you, Beverly. Good afternoon, everyone. Welcome to the MoSys first quarter 2006 financial results conference call. Joining me today is Jim Pekarsky our recently appointed CFO. I will begin today's call with an overview of recent business highlights as well as provide updates regarding our products and markets. Following my remarks, Jim will provide a detailed review of financial performance, and afterward, we'll open the call up for a question-and-answer session.

So to begin, during the quarter, we continued to move toward with the classic Memory MacRo Program. We see a strong level of interest for off these shelf, silicone-proven designs in both 130 nanometer and 90 nanometer geometries. Importantly, we're now also seeing a demand for 65 nanometers as many now SoC designs are skipping the 90 nanometer mode entirely and moving directly to 65 nanometers. In order to address the market shift, we have accelerated work on 65 nanometer implementation and expect to announce a number of partnerships in the new future.

This accelerated shift to 65 nanometers will give a strong advantage to our technology. This is because the scalability of our technology has always been integral to the success of our 1T-SRAM implementations. This means that we can quickly scale our designs to the advanced 65 nanometer and even 45 nanometers geometries without changing fundamental architecture, as would e required with competitive embedded DRAM approaches. In this way, we can put even more distance between our products and those of our competitors. As a result, we're seeing more and more interest from both IDMs integrated device manufacturers and fabless chip in our 1T-SRAM technology as it clearly becomes the most scalable and cost effective solution in these advanced geometries. We believe this market dynamic will help increase the proliferation of our technology in the coming quarters and years, in the multimedia, gaming, wireless, and high-volume consumer applications. We're in active negotiations with several new technology licensees and look forward to sharing results of efforts with you in the coming quarters.

Now I'd like to provide a brief update on the second major technology initiative, our 1T-Flash memory. We continue to make solid progress and have the first design in fabrication. We are also beginning to engage with a few early adopter licensees and expect to fully launch this design in the second half of the year.

In summary, our 1T-SRAM memory continues to gain strength in the market as it is the ideal memory solution for the future implementations of multimedia and wireless consumer products. These new consumer products all have a need for larger embedded memories. In addition, with our expanded sales organization, we are now engaging with a broader customer base in our targeted high growth markets.

Before I turn the call over to Jim for review of first quarter financial results I'd like to formally welcome and introduce him to you. Jim has over 25 years of experience in finance and operations with the variety of high tech companies. As many of you may know, he most recently served as the CFO at AccelChip, an embedded DSP company which was acquired by [Zylinx] in January of this year. Prior to AccelChip, Jim served as Virage Logic's CFO for approximately five years, where he led the Company's IPO in August 2000. Given Jim's strong financial and operational experience in the semi conductor IT sector with both private and public companies, we're honored to have him join us as we continue to execute on the strategies for the future success of MoSys.

Jim will now review the first quarter results and after which we'll open the call for questions. Jim?

Thank you, Chet. Before I review the financials, I want the comment about joining MoSys.

After conducting my due diligence, it became clear to me the Company had a unique IP technology capable of addressing multitude of high volume consumer applications, scalable to advance process technology not\des. My past experience with the IP business model allows me to implement financial strategies that will assist the Company as we move along the path of sustained revenue, and bottom line growth. This was an exciting time to join the MoSys team.

Now I'd like to begin my financial review by starting with our statement of operations. During the course of my comments this afternoon, I will make several references to non-GAAP numbers. Unless otherwise indicated, each reference excludes stock-based compensation expense related to FAS 123(R). These non-GAAP financial measure and reconciliation of differences between them and comparable GAAP measures are presented in our Press Release, and related current report on Form 8-K, which can be found at Investor Relations section of our website.

Total net revenue in the first quarter was $3.5 million, compared to $2.4 million in the fourth quarter of 2005, and $2.7 million in the first quarter a year ago. Total revenue was in line with our guidance of $3-4 million. For the first quarter of 2006, our licensing revenue was $2.3 million; compared to $1.3 million in the previous quarter, and $1.2 million in the same quarter a year ago.

Licensing revenue was recognized from 12 different chip development projects during this quarter, compared to 15 chip development projects last quarter. As we have a limited history for delivering our classic macros to date, we're currently using the percentage of completion accounting for all new memory configurations or variants of a standard product. Eventually we'll develop a delivery milestone approach to recognizing more licensing revenue at the initial time of booking.

Royalty revenue first quarter $1.3 million, compared to $1.1 million in the previous quarter; and $1.5 million in the first quarter 2005. In the first quarter 2006, royalty revenue was earned from 19 different licensees, compared to 17 licensees in the prior quarter. We can expect some of our licensees to begin significant royalty payments later this year.

Under generally accepted accounting principals, the gross margin approximately 90% of net revenue in the first quarter 2006, compared to 90% in the fourth quarter 2005, and 83% a year ago. On the non-GAAP basis, the gross margin was, approximately, 92% in the first quarter 2006. The improvement and gross margin was primarily due to the increased overall percentage of royalty, and classic macro revenues during the quarter.

On a GAAP basis, operating expenses were 4.6 million dollars, in the first quarter, compared to $4.1 million in both the previous quarter and the first quarter of 2005. Total operating expenses included, approximately, $190,000 attributable to expenses incurred from the UniRAM litigation. On a non-GAAP basis operating expenses for the first quarter were $4 million.

Non-operating income, including interest income, totaled approximately, $452,000 for the quarter as compared to $794,000 in the previous quarter. Interest and other expense included a one-time charge for Japanese withholding tax reimbursement, to two of our large Japanese customers.

On a GAAP basis, the net loss for the quarter $974,000, or a loss of $0.03 per share. This includes charges related to stock-based compensation expense. This compares to the net loss of $1.1 million or $0.04 diluted earnings per share in the fourth quarter 2005, and the met loss of $1.4 million or $0.04 diluted earnings per share in the first quarter of 2005. On a non-GAAP basis, the net loss for the first quarter of 2006 was $371,000 or loss of $0.01 per share. First quarter loss per share was computed using 3.022 million shares. During the quarter we recorded significant revenues from four licensees: FUJITSU, NEC, E-Silicon, and Yamaha. Moving on to our balance sheet, as of March 31, 2006, our cash equivalents, and cash in both long- and short-term investments totaled, approximately, $85.4 million, as compared to, approximately, $86 million recorded as of December 31, 2005.

Lastly, I would like to provide revenue guidance for the second quarter of 2006. We expect total revenue to be in the range of approximately $3.5 million, to $4.5 million.

This concludes my prepared remarks. I'll now hand the call back to Chet for his closing comments.

Thank you, Jim. And, again, welcome to MoSys.

In conclusion we discussed with you today the three major drivers that we see for our revenue growth this year. First, our off the shelf, classic macros will allow to expand the customer base and shorten the time to market and our time to royalty payments. Second, we see a definite trend to 65 nanometers designs this year, which makes our 1T-SRAM technology even more compelling in terms of scalability, cost reduction, and power reduction. Third, we expect some of the licensees to begin high-volume shipments in the seconds half of the year, which will increase the royalty collection. And looking beyond 2006, we expect our embedded Flash products to be a significant contributor to the future growth.

That concludes my prepared comments and we're now ready to take questions. When introducing yourself, please state your name, first and last name and your firm's name. Operator?

Thank you, sir. [ OPERATOR INSTRUCTIONS ] Your first question comes from the line of Chris Chaney with Stanford. You may proceed, sir.

Thank you. Good afternoon, gentlemen. And, also, congratulations, Jim, for joining MoSys.

Thank you, Chris.

Sure. I wanted to just go over a few things here and turn the floor over and keep it short, but, first the operating expenses for the next quarter, there wasn't any official guidance given, but are there any major changes in plans that you guys have for headcount or other things that might be affecting the Op Ex going forward, at least for Q2, Q3.

Chris, this is Chet. No, we don't see any dramatic expenses, any changes going forward. It is roughly the same. I mean, we talked about, you know, the normal operating expenses, UniRAM expenses, and, then, you know, the stock-based compensation is what it is.

Okay. Do you expect UniRAM to remain in about 190 a quarter; is that going to be changing much at all?

It's in the ballpark.

Okay. Any end in sight to that? Or -- what's the next step with UniRAM?

Well, so in terms of UniRAM, we now have, as we've been long expecting, the claims construction. So we can now proceed to challenge this case effectively. You know, and we've long-taken the position and we don't violate the patents, the patents themselves are of questionable validity and the trade secret we don't definitely don't violate either. We're going to move forward now, because now the ground rules are set and we can now go and openly challenge all of this.

Got you. Housekeeping question here on the headcount, were there any adds or drops this quarter?

Actually turns out that it was no net change. There were four additions, and four departures. So no net change in headcount from the prior quarter.

Okay. Where the -- I'm curious, were the adds in marketing and sales, engineering? What sort of areas are seeing the changes here?

Actually it was one or two adds in engineering. One or two in sales. Although--

Sales and finance.

Some are replacements.

Right.

Okay.

And of course there was a CFO add.

That's the big add.

Bottom line.

That's right.

Got you, okay. Finally -- I'll turn the floor over after this. This is the first time, Chet, I think you really talked at any detail about the 1T-Flash on a conference call and I wanted to know -- you said the first design in the fab today. Should we expect to see royalties, it sounds like we might see royalties from from the second half of the year or next couple quarters. And also, is there any idea, have you taken license revenue for this?

No, we've not taken a license revenue and I don't expect we'll see any royalties until next year.

So sort of--

We could see some license revenue this year but going to be fairly conserve and engage with a few customers to begin with, and then the major ramp to occur in '07.

What applications will you targeting with the flash?

Virtually the same applications that we target with our embedded SRAM. If you look at these applications, cell phones, multimedia, they all have both Flash and programmable memory in them. Because, you know, our approach to embedded memory, whether it 1T-SRAM or 1T-Flash, has the same density, low power, and high performance characteristics, we can add the same value for both types of memory.

Got you. Now, one last thing I thought of, and that is interest income. Do you expect that to move back up to the 700,000 level or so in the next quarter?

Absolutely, yes. This was just a one-time expense that was related to some Japanese withholding reimbursement. That's tied to two of our large Japanese customers.

Thank you very much. I'll turn the floor back over to the operator, thanks.

Your next question comes from the line of Dennis [Vasson] with [Canaccord] Adams. You may proceed, sir.

Thanks. Couple of questions. You talked about customer activity 65 nanometer and the idea that a lot of customers are thinking about, or are, skipping 90 nanometer completely and moving right to 65. Can you go into that in more detail, is that something you're seeing broadly across customers and specific applications or is it sort of focused in specific areas?

Sure. This is Chet. I'll make a few comments. This is something we've been long watching. There's two factors that contribute to this. One, the adoption of 90 nanometer much slower than expected, partly because there were serious engineering difficulties, particularly leakage, that had to be dealt with, transistor leakage, and that took a long time to figure ways to deal with it or work around with it.. Second, the cost adder was staggering over .13 and .18, the wafer cost was almost double, albeit bigger. So that slowed adoption of 90 nanometer. Those problems have kind of been dealt with and today designers could use 90 nanometers, they know how to design with it. But now you can look at 65 nanometers and it's exactly the same equipment and exactly the sam fab. It's just an optical shrink, so it costs you no more and it causes you no more leakage or other technical difficulties than 90, why would you bother with 90, just go right to 65. The cost is the same. And that's what many are opting to do that are starting new designs now.

Sounds like something seeing pretty broadly now is that the case across the customer base?

Yes. There will always, for other reasons, people will use 90 if they started with it. But in general, across the entire spectrum we see people looking, you know, you know, mostly 65.

And we're seeing this as a big opportunity now for some of the large IDM customers that, you know, might have had an internally developed embedded DRAM or were just designing memory off chip and now the shift to 65 nanometer, our technology becomes very compelling to them as alternative to the other methods.

Look at DRAM and Flash, they're highly tuned and you need specific specialized process steps to build them either as off chip or embedded. They take a long time to craft. When you have to move quickly, from one generation to the next, it is a big disadvantage for the guys, it take as long time. It is not just a simple optical shrink to go from 90 to 65, whereas for us, it mostly is.

Okay. So, I guess, sort of derivative question here is, are you seeing sort of this phenomenon, is it having a direct impact on the license activity in terms of just opportunities? Or sign deals? How is that impacting it? And then, license revenue in general was up $1 million sequentially here, almost double from Q4. Any other comments on that side, just in terms of contracts you've won or anything like that you can with us?

Q1, we don't have any revenue from 65 nanometers, because we haven't shipped it yet, so we're not recognize it. We have a lot of activity, as we said, this is part of it, we see a lot of companies coming to us because you know we do have scalability and now more competitive advantages at these geometries. The major factors in the run-up of revenue, yes, we continue our broad base bookings effort, but had these deferrals as well that we talked about in the fourth quarter for our classic macro, so it's just now steadily going back on track. With--

Perfect.

-- recognition.

Great. Last question for me, royalty side, you named a few players here that were significant contributors to the quarter and you're talking about the expectation that you're going to see some ramps in the second half at some of these customers are specific designs. Are these the same people you named here, this quarter, that you're expecting a ramp? Or is there a broader list that you're expecting? What are the drivers here, specific end markets that are going to be the May drivers?

It's mostly same list. And you know we talked about some of the named drivers to our business like gaming and related things. And so it is that.

We also expect the number of actual royalty licensees is trending upwards and we anticipate will continue to trend upwards over the upcoming quarters, as we go after some of these 65 nanometer deals, a lot of which to new customers.

Okay. Thanks, guys.

Uh-huh.

Your next question comes from the line of Dan Scovel with Tokeneke Research. You may proceed, sir.

Hello. Couple of questions here. The list of four major customers that you provided, I'm sorry, were they all over 10%, were they all royalty, or mix of both royalty and license?

Mix of royalty and license. And they were mentioned because they are all over 10%. You'll find them, also, in our 10-Q for the quarter.

Okay. Also, the -- you know, in the previous quarter, you have the issue with the revenue recognition associated with the classic macro, is this something that you kind of grown out of? Or pretty much resolved? And it would seem to me that we might be faced with a similar problem when you're talking 1T-Flash or 65 nanometers that might delay some things here. Why wouldn't that delay, I guess, some revenue recognition there?

Well, for Flash, it may, but here, again, since the bulk of that isn't really occurring until '07, right? It is a bit unknown. Because for the same reasons that we can establish VSOE for 1T-SRAM, it may well apply to 1T-flash, because the licensing model, the technology is virtually identical, if you know what I'm saying. The nice thing about the booking these classic macro-types of deals, is that the revenue would generally be recognized over, you know, several quarters, you know, perhaps two quarters on a percentage of completion basis. They're not over multiple quarters. So, as we continue to grow and expand our off the shelf classic macro program, we'll continue to build more history for these type of deliverables and will put us in a a position to get the point where we could take more of the revenue up front; more on a delivery milestone basis than a percentage of completion basis. But in terms of linearizing our licensing revenues on a going-forward basis, a percentage of completion for both large IDM deals and also classic macro deals, helps us to linearize our revenues as we make those deliverables. From this point going forward we shouldn't have any surprises.

As you know, I mean, we've, you know, we've been -- we've been saying that the second half of this year, 2006, will be, you know, much greater than the first half because of these effects. We've been planning for that.

Okay. So, so I guess -- I mean, in essence, you're kind of growing out of revenue recognition issue with the classic macro then?.

Absolutely. Yes. I mean, there was the Q4 was a sort of a one-time event where the Company had, you know, booked large deals where they felt they were sort of borderline in that they had small inner components and you ouldn't take all of the revenue up front. So they had to go into a percentage of completion deferral. That being said, that one quarter adjustment is now taking place and on the going-forward basis, all new bookings will be part of our linearized licensing revenue, we don't anticipate that type of--

Jim said, quarter-over-quarter more revenue up front until we reach the true model of how you would recognize standard off the shelf project.

Correct.

Got you. Now when we shift to 65 nanometer and do you have to kind of start all over again with that building of history? Or does this percentage of completion sort of help to you recognize that a little bit earlier?

No. It has really more -- it has less to do with geometry than it does the packaging and configuration of the product. In the past, we did virtually all of our business as custom macro on percent of completion, we did not have off the shelf products. Now we have off the shelf products, whether it's an off the shelf product at 130 nanometers or 90 nanometers and we have both today, or 65/40, they're all the same and they'll be treated the same.

Okay. Okay. I understand. So, the way that it is a standard offering now as opposed to custom offering and so the accounting treatment is different?

That's right.

Correct. To your point as we start booking some of the initial 65, as we're rolling those products out to the customers, there will be percent completion, but then they will become off the shelf products.

Okay.

However, at 130 and 90, you know, we have our off the shelf classic macro program today.

Okay. With regards to the 1T-Flash is there anything, any, any sort of insight to provide on that? Is it a EE prong, is it a Flash? You know, the 1T-SRAM is a bit of an oxymoron, so I guess I'm a little afraid of the name there.

We're not announcing the product. The marketing guys get nervous when I talk about it, but it's an important part of development and future prospects of a Company and we're beginning to talk about it from a business point of view and market point of view. We're not talking about the technology, we're not announcing it, we're not pricing it publicly today and not ready to do that until the second half of the year.

Okay. In terms of the market mix, obviously, you're talking gaming, that's something will be big, multimedia, which, I assume, means MP3 players, and of course you have cell phones. Clearly there's been a lot of gyrations, pretty specifically in the MP3 space among suppliers in the last couple of quarters. I guess the question would be, how could you not sort of see that in your royalty stream?

Not see the gyration?

Yes. specifically, two of the bigger players, SigmaTel and Portal Player are seeing significant weakness. We can talk about timing, but obviously there's a changing of the guard happening there.

Well, what we always said, things like so-called Video iPod or multimedia MP3 video-kinds of players are sweet spots for our technology. So we -- our technology will be in them. Who ships the chips is a different question and I think it is -- you know, we can be fair in saying we are actively engaged in trying to -- selling in all of the possible players in that business. And, so, if one of -- you know, the net royalty of the net effect for us should cancel out if we have adequately penetrated all of the players, as the market shares change among each of them, we don't really care. You see what I'm saying?

Right. So, I guess, you're not seeing any weakness at all? You just see a kind of a market share shift camp?

Yes. I mean -- yes.

Okay. Okay. Well, I'll save the zinger for last, on the prior call, you articulated a target of $20 million of revenue this year, do you -- are you not refreshing that? Are you refreshing that? Can I hold your feet to the fire on anything?

We're holding our feet to the fire on that. Maybe that was an oversight, but saying nothing means unchanged and we're still targeting $20 million this year.

Okay. Great, thank you. Good luck.

You bet.

Thank you.

Your next question comes from the line of Nimal Vallipuram with [Hapallum] Securities.

Hello, Chet, how are you? Jim, welcome to MoSys. A few questions, most of my questions have been answered. Number one that in the last call, Chet, you had indicated that you might have to change the way you do the sales in Asia, partly going from indirect to direct channel and because of that you might have to add some more people. Can you give update on how that's's working out so far?

Yes. It's working out well. We're continuing with the strategy. We have added one direct person in Korea, we are about to add this quarter one direct person in Taiwan. We have people in Japan already. Beyond that, we don't see much change. We're get to have direct coverage and want to make sure Japan, Korea, Taiwan, are directly covered.

So is it safe to assume that change in that coverage is already -- you are seeing a higher sense of effectiveness on that?

Yes.

Okay. My other question is that you had said that you don't want to talk too much about the new technology, but assume this is conceptual technology and MoSys has nothing to do with it, I just want to understand this technology. In terms of 1T-SRAM, your advantage is simply that 1T-SRAM implements an SRAM-like --

Yes.

-- Product with 1/6 of silicone real estate.

Yes.

And you have a core competence of offering slightly larger memory block to an SOC designer.

Yes.

Can you on the same terms explain the 1T-flash does to the customer?

Yes. So today, you have choices. There are solutions to put non-volatile memory on an SOC. But they're very, very large memory cells and you can put a few hundred bits or kilobytes. You don't put not megabytes. So our approach is the sam as with 1T-SRAM. We will allow you to cost effectively and at low power consumption put megabytes of Flash onto an SOC.

On the initial Design wins, when you say megabytes, I don't want to get too specific, are you talking about one megabyte or talking about multiple megabytes?

More.

More than that.

Yes. This is, as I said before, this is really targeting the NOR-Flash applications. Things running program code that have to be fast and more tightly integrated they are with the system chip the better.

Finally, bring back to Dan's question on the classic macro that I just want to understand is, whatever internal benchmarks you had, as far as you need to pass to claim that account and treatment for the classic macro that you are qualifying so far the benchmarks are passed so that you're confident that whatever the timeframe you have given us, that you're revenue is from the classic macro product, you can start recognizing that revenue without facing the same issue you faced with the auditors on fourth quarter '05?

So, the answer is yes. And, but it's going to take -- just a matter of time over two or three quarters, we will work out all of our, you know, existing contractual arrangements and bringing in new ones that better line up and make it easier to establish the SOE. It's just going to take some time, but we all knew what we needed to do to get there. It wasn't -- there wasn't any significant obstacle to doing it.

As far as that benchmark, whatever the timeframe you had in mind about three months ago, that hasn't changed yet?

That's right.

Okay. Thanks, Chet, and good quarter.

Thank you.

And good luck, Jim.

Okay, thank you.

[ OPERATOR INSTRUCTIONS ] Your next question comes from the line of Karen Payne with Pacific Edge Investment Management.

You may proceed. Thanks. With regard to you Q2 guidance or 3.5 to 4.5 million, can you give us idea how you expect that to split between royalty and license?

It's Chet. We don't expect substantial change in the first half of the year, in terms of the relative break down between the licensing and royalty, because we mentioned, in the second half of the year there were other factors. There are some large-volume applications that should begin shipping so that royalty percentages should grow as a percentage of overall revenue. Not in the first half. So more or less the same. Albeit in the first half, you know, Q1 and Q2 seasonal slow quarters for royalty; Q2 more than Q1 because the royalty reports and payments we receive in Q2 represent chip shipments in Q1 and that's post-holiday season at a very low level.

Right. Right. So, then, but -- so -- so assume that you're license revenue is going to go up, sequentially?

Correct.

And what is your visibility to that?

Good. Well, remember, Jim mentioned that since we're -- we've had to go to more of a percent of completion on all of our bookings anyway, this tends to smooth things out, quarter-over-quarter, improves your visibility. That's the good news.

It puts revenue in backlog that you can linearize on percent-completion basis in combination, I think we've indicated, I think, with the classic macro program in combination with this shift to 65 nanometer, we're seeing our funnel of sales opportunities growing. Although it is hard for us to predict when we're going to close some of these deals, some of which are very large deals and the sales cycles are longer.

Uh-huh.

You know, we certainly have a good funnel ahead of us, we just need to go execution from a sales perspective.

Okay. And then finally, to the visibility there isn't necessarily reflected in deferred revenue?

That's correct.

Okay, Thanks.

At this time no, further questions in queue and I would like to turn the conference back over to Mr. Chet Silvestri for closing remarks.

Thank you. Thank you, all for joining us on our first quarter 2006 conference call. And as we said, the latest information we have, financial information, and product information, can be found on the website: www.MoSys.com. And, again, thank you all for joining us today.

Thank you, good-bye.

Ladies and Gentlemen, I would like to thank you for your participation in today's presentation. This concludes the conference. You may now all disconnect and have a great day.