PolarityTE Inc (PTE) 2005 Q1 法說會逐字稿

We have a technical difficulty with the operator. Mary, thank you again for the introduction, Mary went through Safe Harbor, so you all know that it is in effect here. I want to welcome Mary to Majesco, and welcome everyone on the call. As I said earlier, the company thanks you all for your interest and support.

We are pleased to report very strong 1st quarter results, which put us on target to meet or exceed our annual (indiscernible), as I said, in which we received 2 major milestones. First, we completed a significant registered public stock offering, and this offering provided us with working and investment capital as a foundation for additional growth. Second, began trading on the NASDAQ National Market System.

Additionally, Jesse will give us color on this, each of our 3 product lines, games, video and gadgets, has made meaningful progress. We actually now find ourselves in the strongest business and financial position in the company’s 18 year history, while maintaining our unique entrepreneurial and innovative spirit. We are actually very proud of the accomplishments of our entire 79 person team.

As you know, in January we completed a $75 million secondary offering that included 2.3 million shares offered by selling share holders, and 3.7 million primary shares, resulting in $42 million in net proceeds for the company. In addition to that, we also received $18 million to the extra (indiscernible) of warrants which were issued to investors, including the selling shareholders, as part of our private placement last year. As a result in toto we increased our capitalization by $60 million during the quarter, and significantly improved our working capital.

These achievements are the collective result of our diverse portfolio and digital entertainment products, and extensive domestic retail sales and distribution network, and strong relationships with leading content providers and independent video game developer. In addition, this year, we look forward to outside for new consumer promotions and a very significantly expanded lineup of premium video games as well.

Now I would like to turn the call over to Jan Chason, our CFO, to provide the quarterly financial results. Jan.

Thank you Carl. Net sales for the quarter were $30.7 million, an increase of 25% versus the 24.6 million reported in the first quarter and in January 31, 2004. Gross profit increased to 11 million for the quarter, compared to 7.5 million in the comparable quarter last year. Our strong revenues were driven by our gadget product line, which includes our TV arcade game.

Additionally, during the quarter we were able to capitalize on the almost 30 million Game Boy Advance install base in North America, with our value line games and video titles.

A breakdown of our revenues were as follows. Games accounted for 45% of revenue, principally value line titles. However, we plan to release significant new premium titles throughout the remainder of the year. Video 20% and gadgets 35%.

Last year at this time, our video and gadget profit lines were still in the planning stages, and therefore games accounted for 100% of net revenues for the 1st quarter of last year.

This year the increase in gross profit was driven primarily by our gadget product line, which operates on a significantly higher margin than our value games and videos. A substantial portion of our overhead is fixed, we have exceptional built in leverage, thereby increasing revenues drive additional profit.

Our margin objectives for each of our product lines are as follows. Games overall 30% with a premium starting with 30s and value in the low 30s. Video starting in mid-20s, however we anticipate that these margins will grow into the low 30s. Gadgets hig- 40s.

Our research and development costs for the quarter increased to 814,000 compared to 574,000 for the same quarter last year. The increase was due to increased staff to support new product development.

Failed and marketing expenses for the1st quarter was 5.3 million versus 2.8 million for the same quarter last year. 1.4 million of the increase is the result of television and other promotion costs incurred during the holiday season to promote Bloodring II and GBA video.

In the prior year quarter there was no significant promotional program. The balance of the increase is attributable to increased shipping and handling costs related to video and game, as well as gadgets imported from Japan and China.

General administrative expenses increased to 2.2 million from 1.7 in the 1st quarter of last year. As expected, we have increased costs in becoming a NASDAQ listed company, and in building our infrastructure to support current and future growth.

The increase in G&A was attributable to increased staffing costs of 356,000 and 445,000 of expenses are related to being a publicly held company. These increases were offset by the absent of the write off of $577,000.000 related to the KB Toy bankruptcy incurred in Q1 last year.

Operating income was 2 million for the quarter, versus 2.3 million for the same period one year ago. Operating income should increase as a percentage of net revenues during the remainder of the year. In addition, we expect our operating income in the balance of the year to be favorably impacted by our planned increased number of premium game title releases.

For the quarter we generated a net income of 700,000. As a result of a one time charge of 1.1 million related to the incentive, granted for the early exercise of warrants by certain holders, we reported a net loss of 2 cents per share, applicable to common stockholders. Compared to net income per share of 25 cents for the same period last year. Excluding this one time charge, we would have reported a net income of 5 cents per share for the first quarter of 2005.

We completed the first quarter with 65.6 million in working capital versus a deficiency of 8.8 million at the quarter end last year. This translates to a ratio of 3.7 versus .5 last year. Stockholders equity of January 31, 2005, was 74.7 million versus 13.8 million as of year-end.

As Carl mentioned, the increase in our financial strength was principally due to the completion of our public stock offering in January, plus the related warrant exercised, which together raised 60 million in net proceeds.

Our basic and diluted weighted average days outstanding at the end of the quarter were $16.2 million. As a result of the secondary on January 31, we issued 3.7 million shares which did not have a significant impact on the weighted average computation for the quarter.

Going forward, the weighted average number will increase accordingly. Overall, we are very pleased with the financial results reported today. We believe we are effectively managing to our operating plan, and feel confident in our ability to achieve or exceed our previously stated guidance.

I would now like to turn the call over to Jesse Sutton, our President, to discuss operations and highlights from each of our three product lines. Jesse.

Thank you Jan. As we discussed last quarter, our strategy is based upon offering a diverse range of products and content of digital entertainment platforms. I will now update you on each of the three product lines. We will start with games, including both premium and value titles. It is our strategy within our games group to support all platforms of Majesco premium titles, including the new Nintendo DS and Sony PSP platform. On November 2nd, we announced a major development deal with the award winning developers, Starbreeze Studios. Starbreeze created one of last year’s most highly acclaimed games, Chronicles of Riddick - Escape From Butcher's Bay. We will be working with them to create a next generation console title, based on the highly popular license. We expect this to be a premium title. This relationship underscores our unique creative culture, allowing us to cement strong relationships with many of the best independent developers in the industry. We anticipate similar announcements, with top developers throughout the year. During the 2nd quarter, we plan to start shipping Psychonauts. The highly anticipated new video game, being developed by Double Fine Productions. Double Fine is a studio founded and managed by the award-winning game designer Tim Schafer. Psychonauts is being developed for playing on PlayStation 2, Xbox, and PC. In our 3rd quarter, we plan to release Advent Rising, the first title in the planned that is being developed in collaboration with award winning science fiction author Orson Scott Card. It is scheduled to ship on Xbox, and the PC. This summer, for the first time, we will be releasing Jaws, based on one of the most enduring action suspense films of all time. It is being developed by Appaloosa, and it features an innovative twist where players assume the role of the shark. The game is planned for release in the 4th quarter for the PlayStation2, Xbox, and PC. We have been getting great feedback on Advent Rising, Psychonauts and Jaws and we expect those to be top premium based performers for 2005.

We also announced 2 original titles for Sony’s highly anticipated PSP platform, Advent Shadow and Infected. Infected is a thrilling new run-and-gun shooter that allows players’ avatars to invade opponents’ PSP systems via multiplayer victories. Scheduled to ship this fall, Infected is the first release in an exclusive three game PSP deal between Majesco and Planet Moon Studios. Advent Shadow is a derivative of Advent Rising. Its featured list of characters is designed exclusively for the PSP system and will release later in 2005. PSP is a platform we will be extensively supporting and we have a minimum of 4 additional titles that will be announced later this year.

Moving to the Game Boy Advance DS, we announced Nanostray. It was developed by Simon and utilizes the DS’s new touch screen technology. It allows players to track enemy movement with interactive radar and management all of his weapons and other special pick-ups. Nanostray will be launched later this year and will be Majesco’s (indiscernible) standard for the DS. We expect to announce at least 8 additional DS titles this year. Additionally, we will be shipping high quality value titles such as Phantom Dust, Raze’s Hell and other titles yet to be announced throughout the remainder of 2005.

Getting out the video, we achieved positive overall results for our Game Boy Advance Video sales in our 2004 holiday season. Merchandizing during the key holiday period, including 2 retail (indiscernible) events; including 1 of approximately 1300 Wal-Mart stores and the video itself explains it all with 500 Toys Are Us stores. We are working with those key retail planners to roll out similar kinds of self promotions for key upcoming shopping seasons and product launches. We are also testing prime elasticity at various price points in conjunction with Nintendo and a prime set of retail partners. We will do this while sustaining or increasing profit margins.

During the quarter, we also took care of the rights to publish several Disney properties with proprietary Game Boy Advance video compression technology. Specifically with Disney’s Buena Vista’s we obtained home entertainment within the U.S. rights to publish titles based upon well known properties. The first product, Disney Channel Collection Volume 1 features episodes of Disney’s Lilo and Stitch, the Series and Kim Possible. It shipped at the end of holiday season and performed up to our expectations. We expect to ship new additional Disney, Nickelodeon, Cartoon Network, as well as other titles throughout the remainder of the year. We will support them with in store promotions and national [food] consumer marketing campaign. It is notable that within the install base of almost 49 years in North America alone, we believe that Game Boy Advanced Game and Videos will continue to perform well for us the hareware remains quite affordable. In the February issue of Play Things magazine our Game Boy video was ranked #1 as the item that kids ages 6-11 want the most, reaffirming our initial target market and content.

Finally, let’s take look at the highlights in the gadgets unit. They currently include TV Arcade systems, and our wireless communications accessories for the GameBoy XP. Our stand alone TV Plug-and-Play video games systems were launched during the 2004 holiday season and achieved very good retail sales. Since launch almost sold 900,000 TV Arcade Plug-and-Play products. We believe this category has staying power. As such, we are developing several new skews to supplement the line for the balance of the year. Going forward all TV Arcade skews will be wireless. In other words, same simple Plug-and-Play systems, but without the wires. Specifically we are creating 3 new title designs for the mass market; Paintball, Texas Hold em’, and Strawberry Shortcake. In addition, we are upgrading our best selling title skew to be launched as well. Even with the advanced wireless feature we expect to maintain an MSRP of $19.99. Competition in the wireless arcade platform is expected to have $29.99 MSRP, giving us a further advantage in this category.

Our wireless (indiscernible) soft launch and launched in late 2004 but a limited availability. A mutual market research shows high potential. We are working with Nintendo on a marketing strategy to increase product awareness.

We look forward to updating you on the continued progress of all (indiscernible) on our 2nd quarter earnings call. I’d now like to turn the call back over to Carl to discuss regional issues and the outlook for the remainder of the year.

Thanks Jesse. Now looking at the balance of our fiscal year, we are going to release more premium and more value game titles than ever before. Conservatively budgeted overall, these new game releases should be a major Majesco growth engine this year. In addition we are doing innovative, more and better overall in-store marketing than ever before across all of our businesses and plan to announce several new promotions at E3 in May.

Throughout the balance of the fiscal year and beyond we will remain focused on a 3 prong strategy to continue to deliver profitable growth for Majesco. First, we will work toward achieving a well balanced and profitable organic and non-organic product mix. While about ½ of our budgeted revenue is currently from traditional consoles, Game Boy Advanced and PC games as well as PSP, most at premium, we will pursue new platforms and technologies for all product lines with the ultimate goal of receiving a balanced revenue and product mix.

Our target does remain to receive approximately ½ of our growth organically from our current product lines and ½ from new growth outside our current product lines and this is a 3-year objective. Secondly, we will continue to develop new content and partners in our games and video product lines just as Jesse mentioned, we secured a development field with Starbreeze Studios during the quarter and additionally trying to procure a deal with Planet Moon. We also brought Disney titles on board for Game Boy Advanced Video.

We believe our abilities to secure new relations, with top developers and content providers, is a key strength, critical to our success. And third, we want to expand our international presence with only 2% of our revenues coming from Europe and virtually none from Asia. We do view international growth as a significant opportunity and although no incremental international growth is budgeted for this year, we have the both organic and non-organic exploration of this important area and the upsides are impressive.

With that backdrop let’s look at some specifics for the coming quarters. Sony recently announced a release date of March 24th for the PSP and has forecasted 1 million units for North America sometime in March. We are bullish by the thought of this new portable system from Sony, as Jesse said earlier we plan to significantly support this platform and have announced 2 original PSP pedals, Infected and Advent Shadow. Both are receiving positive editorial preview coverage and we expect them to be good performers, and in addition we have many more PSP pedals in the pipeline. With the launch of Nintendo’s DS system receiving sales of over 2 million units since November, the installed base of Game Boy Advance compatible hardware is now approximately 31 million in North America and this bodes very well for our Game Boy Advance Video and Game Boy Advance Game titles. Additionally we have announced DS title, Nanostray and have several more in development for 2005 and beyond. We believe that the GBA and BS products with their relatively low price points will remain attractive in the marketplace.

At E3, May 18th through the 20th in Los Angeles, we will have a 7,000 square foot booth in the South Hall of the L.A. convention center. We will be displaying our full line up of premium and value video games for the remainder of the year, we will also unveil a number of new gadgets and in addition we will demonstrate a number of exciting breakthrough promotions we have planned for products within each of our product lines. One example is a million dollar consumer promotional giveaway to support the release of Advent Rising, which we conceived and are developing in partnership with Microsoft XBox Live. In addition to unveiling our promotional plans at the show, attendees will be able to participate in scaled down versions of the promotions designed exclusively for E3 attendees. And then some of you may know will also be presenting at the Webb-Bush-Morgan Conference this Friday, March 11th at 9:30am in New York City.

For our guidance, we are reiterating our fiscal 2005 targets for the year we have spent net revenue of 175-185 million of operating income of 16-18 million. With several key growth incentives underway we’ll update that as appropriately and as necessary.

So in summary, we do thank you all for joining us today, we’ll keep you abreast in turn f material developments throughout our on-coming quarters and at this time I would like to turn the call over to our Operator, Holly for questions.

Thank you sir. [OPERATOR INSTRUCTIONS] Our first question comes from Michael [Baxter], Morgan Securities.

Could you talk to us about revenue concentration? You talked about 1600 Wal-Marts, 500 Toy “R” US. I just like to know if you have any kind of metrics on how much your revenues come from your cable customers, your Top 5 customers and also explain way is it taking so long to expand internationally when you have partners like Wal-Mart and (indiscernible) international.

I’ll take the first part of that and I’ll let Jesse talk about the international part. In terms of our mix it very much follows the overall commodity volume of our industry. We’re concentrated against a Toys “R “US, Wal-Mart, Target, Jack of all Games and the distributor basis to the 20% of the guys that we don’t sell direct. So, there is no significant revenue geared different than the normal all commodity volumes gear in the digital entertainment industry for us.

In terms of international, obviously we’re looking for appropriate distributor and publishing relationships and we have some localization issues in certain countries as well and I’ll let Jesse give you a little more color on that Michael.

Historically Michael, we have been licensing our products to different publishers to publish in Europe and UK. We currently – we just currently completed a ratio in Europe that resulted potential distribution partners through out the major territories. We are in the process of receiving distribution deals on different distribution opportunities from them and we will – once we close our distribution deals we will let the market know accordingly.

[OPERATOR INSTRUCTIONS] Our next question is coming from Ingrid [Engerling] of JMP Securities.

How many PSP titles do you expect to be in the market by the end of the year? I heard 2 for sure and 4 under development. Do you expect those additional 4 to be out by Christmastime?

Jesse, this is Ingrid of JMP. The question was how many total titles we will have out for PSP by the end of the year. We said 2 and more to the hopper I think she’s looking for some finance color.

We will be releasing the information on that soon as we announce those titles but most likely they’ll probably released early and late next year.

With sales and marketing can you provide a little bit – I heard at one point 7 million additional TV campaigns drove up the sales and marketing cost this quarter. What can we expect going forward incrementally on that expense line? For example, how much do you expect to spend at E3? I heard a $1 million promotional campaign for Advent Rising and what other campaigns are you planning around the releases of that and Psychonauts?

For competitive reasons I’m not going to give you the exact spent for promotion, Ingrid. I can say that on advertising alone we’ve managed to increase our revenue guidance by 50% or doubling our market spend and still holding to a 10% face market contribution margin with upside. In terms of the promotion, the $1 million giveaway doesn’t necessary cost us a full million dollars obviously. As we know from all the other promotions where you can pay them out over time etc., but the most important thing is that we are striving to be innovative in terms of the products within each category that we participate in and we are now starting to be innovative in terms of the way we promote and market our products in each category. We also believe that there is tremendous upside in our conservative budging for the large number of premium titles that we have this year that Jesse took you through and you’ll see more marketing spend against those titles so that we have high leverage against potential return that exceeds our guidance and we’ll just see how it goes.

Do you expect Q2 sales and marketing expenses to be incrementally higher than they were in Q1?

Yes we do.

Then if we could get an update on the 90 minute chip and where that stands, please.

Sure, Jesse why don’t give a little color on that.

Ah Sure. We will be discussing that – announcing that over the next 25-60 days and will be making an announcement to the public as to what exactly our strategy is going to be on that as well.

[OPERATOR INSTRUCTIONS] Our next question is coming from Jordan [Rohern] of RBC Capital Markets.

I’m trying to get a break out in terms of percentage revenue mix from games, gadgets and videos for the 4th quarter results. I think if I remember correctly you guys did over 20 million in the GBA video sector in the 4Q and it dropped to 6 million this quarter. Is that correct and then I have a follow-up question please.

I think it’s directionally correct, but I’ll let Jan speak to that and if need be, we’ll get back to you Jordan offline with the exact numbers. But directionally it’s correct and primary because obviously the selling for the – the holiday season is the peak seasonality time of the year. Plus we have the buzz of the product being new and that high peak assumption period for the first time and you have a normal follow-off in the consecutive quarter. Jan anything to add?

I don’t think we have anything to say after that comment.

Follow-up question a couple of things actually. Can you specify the exact margins, gross margins on each product line during the quarter so we can understand where that gross profit came from? I think I heard you mention ranges but I’m not sure I heard the exact margins. And second, can you remind me what the company policy is on insider selling? When does the window open again and is it 48 hours after an earnings report? How many weeks before the end of the quarter just to close?

The last part I will refer that to counsel. I don’t think on the phone here we gave the capability to do that for a full answer. As to the revenue guidance that remained a few minutes ago – the margin guidance I gave a few minutes ago, I’ll go over it one more time. In gains our objective is have overall 30% plus with premium staring at the high-30’s, values in the low-30’s, video starting in the mid-20’s however, we anticipate that these margins are going to grow into the low-30’s and gadgets high-40’s.

You say starting amounts that was reported for the 1Q numbers? Is that how they came in 1Q?

Yes, that is correct.

That’s good enough for my math. Thank you very much.

All right our pleasure. We’ll get back to you separately with the window I guess I can optimistically say that outside of the previous declaration of the (indiscernible) family to sell a few hundred shares which didn’t consummate I think overall management is pretty happy with where we are and we think there is upside and I don’t anticipate insider trading.

Here our final question is coming from [Shi Gerson], from [Corsiar] Capital.

Could discuss a little bit what your doing on the video front to kind of get some better merchandised and maybe talk a little bit about what the opportunity is there as more consumers get aware of the products?

Yeah, I’d be happy to talk about that. First of all, we found the qualitative and qualitative resources that were done to date and then we’ve also had four promotional houses in here with Ken Gold, our Head of Marketing. Who has given us some promotional ideas and some basic market research that says that we are targeted correctly for age group 6-11. This is where we seem to have the primary “wow” if you see well at this point we think that was the correct launch target. I’m meeting with Lester Greenman who you know is new on board and heading up our video SVU with Reggie Pidemawho’s the North American new Head of Sales and Marketing for Nintendo.

Later this month we’ve agreed in principle to corporately be more stronger against this category, he wants to do that, we want to do that. We agreed in principle that there will be more support directionally from the royalties that we pay from Nintendo and now just working the tactical plan. Obviously we have up-sides in terms of longer content on the 90 minute chips which Jesse said we will be announcing shortly. Buster’s on a tear right now to get that content on board as you probably know he has a lot of experience in that area having headed up the content acquisition for Sony PlayStation, on its original launch. All I can say is its positive work in progress so everybody wants to move in the same direction.

We also just came off the Digital PlayStation conference down in Arizona. Were we had good meetings with all of our key accounts and they are excited is the feedback that I got from Morris Sutton about our plans specifically which I can’t divulge again for competitive reasons is to how we want to directionally merchandise video. They are also excited about our expirations and price elasticity as are our content providers and Nintendo because obviously we want to make sure we get the biggest bang for the buck out there and we’re assessing all price various points that I think importantly as Jesse said, we’re not bad business people so we’re not going to give away margin in the process. I hope that helps you Shi and we can give you a little bit more color if you like in greater detail outside the meeting.

Thank you our last question is coming from Jeff Osher, JMP Asset Management.

Hey Carl can you just give us a little bit of color on the initial reception from your Q retailers with the new wireless TV arcade skus?

Outstanding and they are mild. I mean these guys liked them. They think it’s cool and what they really also appreciated is that we think the efficiency in our manufacturing development operations is going to allow us to offer at least the equivalent if not superior product and at a greater value than our competition. That gets everybody excited.

Carl, I mean your competition – your priced 33% below your competition I think you said despite the fact they’ve – it’s kind of been a killer product for them. Are you guys sacrificing margin at that price point?

No we’re not. That’s the beauty of this, we are able to get our cost base down so we are actually able to maintain or slight grow margin for an innovative product and trickily undercut competition which is why the trade is so excited Jeff.

Great that’s outstanding. One final question. Along the lines of these – the reviews on Games Spy or Advent Rising, Psychonauts – just looking at the guidance that I just sent and I respect that you guys are airing on the side conservatism. Can you just give us a sense Carl or Jan for that matter of what the EPS leverage could look like on the front line for say 100,000 units of up-side what your guidance what ever that may imply could be?

Jan I’ll let you take that one. Obviously there is elasticity there and as we said in your conference Jeff in San Francisco last week. We budget 150,000 into 200,000 units for council for title which is darn conservative. Jan I don’t know if you want to share the leverage on the up-side or not but I’ll let you take that.

The most important thing is in our forecast we use mid to high 30% margin for our expected or our initial quantities going into the marketplace. Every time we increase those it’s going to drop – significantly drop to the bottom line Jeff.

Can you – I mean is there a rough feel Jan for what you can give us as far as the contribution margin? Because it seems like given the budget you just stated there of 150,000 games and there could be dislocation it seems just given the level of these reviews that have come out of the major online game reviews.

Well, Jesse and Jan are arm wrestling to see who answer the question here. The one point that I want to say Jeff is we don’t give quarterly guidance obviously here but as again as we’ve said in open and private meetings in conferences. The margins can go well over 50% if we have units well in excess of the amounts that we’ve budgeted. So, it’s fairly expediential if you will in terms of hitting the larger numbers because we don’t have to dramatically increase the marketing costs if we have a hot game in proportion to the volume, so we get high leverage. I think directionally that’s the best answer I can give you.

And the other point is that we don’t need any significant reserves.

Well that point too is that the reserves come right back to the P&L because obviously we’ve got a hot item. We’ll be fine. And just to make an example to prove the point we tend to reasonably good at this even BloodRayne 2, which we intentionally launched into a very crowded Christmas, fulfilled our expectations and we have not had to tap the reserves and we still sold a quarter million units and we’ll have a softer re-launch hopefully when that movie comes out with Ben Kingsley and the gal from Terminator 3 who’s name I can never remember and I apologize to everybody on the call. She played opposite Arnold Schwarzenegger but that will be increasing leverage there, just as BloodRayne 1 did a total of 600,000 units.

Thank you our final question is coming from Jon Gruber, Gruber McBain Capital.

I wanted to ask the third and final question here. Related to Jeff’s question – which of the high-end games which you think will be the potential home runs of over 5- 600,000 units.

The high end games that have the greatest potential based on buzz so far are three fold and they got initial ratings that preview ratings that we’re getting I don’t know how public they are just 8.5 or above on 10 scale. We have very high hopes for Advent Rising, we like the fact that it’s the beginning of the trilogy – I think you saw a press release that said it has a Grammy Award winning score with it. I call it first action shooter love story it’s a very emotional and moving plot and we have been able to extrapolate into the PSP platform with Avent Shadow. We also have Psychonauts which is extremely hot. I saw an email back from the editor of the The Xbox Magazine that says they are very excited and want to get the whole game. They already said they’re looking forward to the sequel. Which is -- they are a little bit ahead of us but I think that’s terrific.

And thirdly I think we got a cool franchis in Jaws. And I think that Jaws has proved to be a real sleeper for us it has great awareness obviously from Universal Studios with timing during equity. I would say those are our three key games. Infected on PSP has also gotten rave reviews as potentially being one of the hottest games on that platform and we are very pleasantly surprised by that Jon and it just says PSP bodes well for us as well. That’s PlayStation portable. And those are the ones I would look for Jon. Did that answer your question?

Okay cool thanks a lot. Holly if there are no other questions we can close the call. If there are any other questions we’ll be happy to take them.

There are no further questions sir.

Okay then, we thank everyone very, very much for questions and your support in Majesco. It’s been an exciting 7 months for me certainly and a pleasure to work with all of you. For those of you who will be at the [Web Voice] Conference on Friday we look forward to seeing you there. We do look forward to maintaining an open communication with the rest of you on a continuing basis and before we do close the call we want to offer a free demo of our new premium video game Psychonauts, Jonto your anyone who would like one. So if You are interested in getting a free demo copy please call Mary [Menody] at our office of 732-225-8910; just ask for Mary and we’ll shoot you one out when we have them available. Thanks again and all the best until the next time we speak, we appreciate your support.

Thank you. Teleconference you may disconnect at this time. Have a great day. Thank you.