威訊通訊 (VZ) 2003 Q1 法說會逐字稿

Good morning and thank you all are for holding.

I would like to inform all parties your lines have been placed on a listen-only mode.

This conference call is also being recorded.

If you have objections you may disconnect at this time.

I would like to turn the call ore over call ore over to Mr. Chris Boraas.

Thank you, sir.

As a reminder, this call is being broadcast live through our Website at www.rccwireless.com.

An archive will also be available in the investor relations section of our Website.

In addition, after the completion of this call, dial-in replay will be available through May 19th, 2003.

The form 8-K will also be filed today including as exhibits the text from today as teleconference and press release.

We also expect to file our 10-Q tomorrow.

Presenting will be Richard Ekstrand, and Wesley Schultz.

Following the opening remarks, Rick, Wes and Ann Newhall, RCC's Chief Operating Officer will be available to take your questions.

In the interests of time please limit your questions to two during the Q&A.

Before we begin I want to state any comments about RCC's future prospects are forward-looking and therefore certain risks and uncertainties limited to competitive considerations, the ability to increase wireless usage and reduce customer acquisition costs, the ability to negotiate favorable roaming agreements, the ability to service debt, the resolution of certain network technology issues and other factors discussed in RCC's report on form 10-K for the year ended December 31, 2002, and from time to time in other filings with the Securities & Exchange Commission.

In the course of this conference call, we will be referencing nonGAAP performance measures.

For a reconciliation of nonGAAP financial measures to comparable GAAP measures please refer to our Website where you will find the reconciliation in our May 12th, 2003 press release.

With that I'll turn it over to Rick Ekstrand.

Thanks Chris and good morning everyone.

The wireless sector continues to distinguish itself within the telecommunications industry by reporting both strong customer and financial growth.

So clearly there is no substitute for mobility even in today's difficult economic times.

And for RCC, focusing on those things we can control has put together another solid quarter.

We've always known that we are in a business that's competitive, our network technologies require capital, federal mandates bring complexity and we operate in a challenging economy.

Yet quarter after quarter, our dedicated team of employees, together with our strong networks and broad spectrum, continues to provide valued services to our local customers.

Our networks also enhance the extended footprint of our national roaming customers.

Historically we have succeeded by leveraging our spectrum through the carefully planned improvement of our net works.

This expansion has presented and continues to offer attractive ROIs while positioning us for an expedited transition to services.

For those of you who are the counting our networks expanding another 35% increase in total minutes over last year's first quarter.

As you know this trend increases revenue.

Our national roaming partnerships are obviously important to us.

We manage, negotiate and renegotiate our longstanding relationships with these partners which we believe will secure and stabilize our roaming revenues going forward.

Switching gears, this quarter's operating results are solid with continuing strong free cash flow.

Going forward, we fully expect 2003 to present its share of challenges, but also its share of opportunities.

We see the opportunity of rural service areas lagging in wireless penetration compared to metro areas.

Building on this anticipated customer growth content delivery services such as the upcoming launch of our Info To Go position us for stable and even increasing ARPUs.

Out ability to facilitate event billing has been a key step towards bringing the potential of these services to reality.

Our SMS messaging trends offer a clear indication that our customers want and are willing to use these services.

During the month of April this year our SMS traffic increased 740% over last year.

We believe an SMS messaging platform needs to be in place for us to successfully launch additional services that will ride on the text messaging side of our network.

As we discussed last quarter, we received ETC approval in Mississippi, Alabama and Washington and in early May we received approval in Maine.

During the first quarter we recorded $383,000 in revenue as a result of our ETC status.

This funding will allow us to further improve our distribution systems and networks in these areas.

We also have applications pending in Kansas, Minnesota, Oregon and Vermont.

And we expect to receive ETC status in one or more of these states yet this year.

On the operating front, we continue to focus on efficiencies, in how we operate our business.

We constantly review our cost center organization, spending strategies, budgets and forecasts.

We cannot and do not pursue customer growth at any cost.

Rather, we look to long-term quality customer growth as a basis positive revenue improvement.

Our customer base is solid, but more importantly, our retention rate is 98.1% continues to be one of the best in the business.

Wrapping up, our first quarter operating results continue to give us confidence regarding the future of our business.

Once again, with much going on outside of our control we continue to stay focused on running our business including bringing continued efficiency to operations, building and positioning networks for the future, growing and keeping the right customers, and generating free cash flow through these actions.

And on that note, I'd like to again thank our dedicated employees who keep us in the game through their creative solutions to a constantly changing wireless landscape.

With that I'll turn it over to Wesley Schultz our CFO for a financial wrap up of our first quarter.

Thanks, Rick.

RCC recorded a net loss per share before cumulative effect adjustment of 87 cents as compared to $1.28 last year.

However, we understand and appreciate that many of you are also interested in free cash flow.

Free cash flow as defined in our press release is what's left after capital purchases and cash interest expense are deducted from EBITDA.

RCC continues to produce significant free cash flow totaling almost $20 million for the first quarter.

To help you reconcile our unchanged cash position from year end, during the first quarter we paid $6.5 million to exercise a purchase option on a set of towers in our Northwest region.

Additionally, we had a working capital decline reflecting a reduction in our accounts payable and accrued expenses from year end.

We have now reported positive free cash flow for 11 out of our last 13 quarters.

EBITDA or operating income less depreciation and amortization also continues to perform well, increasing to $51.1 million.

Of this total EBITDA wireless alliance accounted for $784,000.

On the surface EBITDA growth may appear to have slowed so I want to explain how a change in our marketing plans effected EBITDA this quarter.

Our customer promotion activities last year utilized phone rental programs capitalizing 6.8 million in hand set costs, while this year we did not utilize this program.

Under the phone rental program, RCC retains ownership of the customer's hand set and receives it back if a customer churns, in which case the phone can be reused.

Helping to more than offset this change this quarter was the growth in our service revenue which increased slightly more than 7% over last year.

This improvement reflects sustained high quality customer growth, strong retention and increasing ARPU.

As you may have noticed ARPU which includes roaming revenue increased to $55 from $54 per customer last year.

More importantly, LSR which excludes roaming revenue increased to $40 as compared to $39 last year.

It's been a long time since we've seen an increase in this key metric.

We believe this increase reflects certain value added services including messaging and USF revenues.

Also we believe the increase in LSR represents a tradeoff of sorts that we've made regarding our customer growth in order to preserve or grow LSR as was the case this quarter.

On the customer front we feel that post paid customer growth represents our best opportunity for revenue enhancement.

Although we did not achieve our internal targets for post paid customer growth increasing LSR $1 to 40 per customer probably brought more immediate and long term benefit to our business than lower LSR and greater customer growth.

Digital customers at the end of the quarter account for approximately 80% of our total customer base.

Going forward, we continue to believe we will get our share of new customers as the market we serve continue to grow.

On the roaming front yield declines continue to be offset by increases in minutes as we are seeing the benefit of our agreements with AT&T, Verizon, Cingular, T-Mobile and others.

Roaming revenues increased $29.1 million as compared to last year at this time.

Although we continue to expect roaming revenues of all of '03 to be comparable to last year, we expect second quarter to be slightly down to the prior year due to certain one time adjustments in the second quarter of last year.

If you recall we recorded a $2 million retroactive settlement from T-mobile second quarter of last year.

Contributing to the overall success of our operation we continue to develop efficiency in our cost structure both network cost and SG&A expenses as a percentage of total revenue were lower in the first quarter than prior year.

Network costs as a percentage of total revenues decreased to 21.5% compared to 22.2% last year.

In collect miss continue to grow yet average minutes dropped declining to $11 million.

During the first quarter with bad debt expense decreasing 24% to $1.9 million compared to $2.5 million last year, SG&A declined as a percentage of sales to 25.7%.

As compared to 25.9% last year at this time.

Turning to our balance sheet, we had net capital expenditures of $5.6 million during the quarter.

We turned up 33 sites during the quarter but it should be noted that the bulk of these costs were incurred in 2002.

As of March 31st, we had $794 million outstanding under our credit facility and were in compliance with all covenants.

Recently we drew an additional $115 million under the credit facility for the purpose of enhancing our financial flexibility.

Many of you may have questions regarding the upcoming cash paid dividends on the senior exchangeable preferred stock in August.

Although we are continuing to evaluate our alternatives we do not currently anticipate that we will declare cash dividends on our senior exchangeable preferred stock for the for foreseeable future except to the extent if any that we may be legally required to do so.

And with that I'd like to thank you and we'll turn the teleconference back to Michelle who will poll you for any of your questions.

At this time if you would like to ask a question please press star 1 on your touch tone phone.

You will be announced prior to asking your question.

With If you would like to withdraw your questions you may press star 2.

Once again if you would like to ask a question please press star 1 on your touch tone phone.

One moment for our first question.

Our first question comes from Pat Dyson.

Please state your company name.

from CSFB.

Good morning, guys.

Had a few quick questions for you.

First, maybe on the -- to comment in regards to recently drawing the $115 million additional under the credit facility.

Could you just maybe elaborate a little bit more on kind of the thinking behind that, and whether it had to do in any sense with what you're seeing operationally or does it have to do with the payment under the swaption that is being put back to you by TDFA.

I guess first on that question.

This is Wes, thanks, good morning.

As we basically said in the prepared remarks, we drew the funds as something we believe we need to do for additional financial flexibility.

We intend to work with our banks to look at covenants and other amendments to our credit facility.

Certainly one of the uses of the $115 million, as you indicated, we will be paying TD as our counterparty to the swaption that we entered into back in March of 2001, something in the $30 million-plus neighborhood to settle that early termination that they exercised earlier this month.

That is a portion of the funds that were used and the rest is for additional financial flexibility.

Okay.

So have you begun negotiations in any sense with the banks related to some of the covenants that you're likely going to run up against towards the end of the year?

At this point we have not.

We anticipate that we will start having conversations in more earnest with the banks shortly.

Okay.

Two other questions.

First, are you able to, given that you saw some ETC revenue in the first quarter, are you able to quantify a little bit better as far as what you expect the full year impact to be?

And then, finally, on the -- could you provide the roaming yield for the quarter, and then just finally, on the credit facility, could you provide the availability under that facility pro forma for the draw?

Pat, I think on your first question I'll try to remember the order that you've asked these in.

As far as the ETC for this year, really, I don't think anything's changed from essentially the guidance that we ended up discussing on the last call.

I think a question had been raised as to how much we would have, and that question essentially included somewhere in the range of around $5 to $10 million.

We said that that was probably in the ballpark of what our expectations were.

That continues to be what our expectations would be for this year.

We're essentially taking a conservative approach to booking of these revenues until we know we start receiving them from the federal agencies.

As far as roaming yield is concerned, our roaming yield in the first quarter was pretty consistent with that which -- what we had in the fourth quarter, which I believe we had indicated was in the 20 cent range for the fourth quarter.

It was slightly more than that in the first quarter.

However, as we had indicated previously, we really feel that for a host of reasons probably not in our best interests to continue to give the same amount of guidance as it relates to yields going forward.

But I think the results certainly speak for themselves in that even with lower yields this year as compared to a year ago, we saw an increase on [out fled] roaming revenue on a year over year basis.

As far as availability is concerned, at this point availability is dependant obviously of a trailing two times two quarters EBITDA so it changes over time.

Also, with the step-down in the leverage that's part of our current bank facility, we anticipate that, you know, our availability as of May 15th, we've drawn what our availability is at this point.

Okay, thanks.

Thank you.

Ethan Schwartz please state your company name.

Ethan Schwartz from CRT Capital.

You aren't going to pay your senior preferred debt is that clear?

We didn’t specifically say that, we said we were continuing to evaluate our alternatives.

However we do think it's probably unlikely that we will pay the dividends on the senior preferred at this point in time, holding open that option.

But I think it's unlikely that we will at this point.

Let me run down a bunch of things then.

First of all, as far as the slight increase in the customer ARPU excluding roaming, were there any new charges on the customer bills?

Are you doing anything similar to what your competitors or other rural companies are doing, as far as tacking on number portability or other charges?

We do have some of those fees but I don't believe they were new this quarter.

They're consistent with what we've had over the past so that wouldn't be the root -- what you're driving at for the increase.

Those increases would have been based on the focus that we've had on trying to increase LSR for our customers.

Certainly ETC did have some positive impact on this.

And features which we've been really focusing on over the last year or so, all have contributed to that increase on a year over year basis.

Okay.

The cost of equipment, this six and change million for hand set costs capitalized in 2002, that's still less on an annualized basis than the increase this quarter.

Was there something else going on that raises up this quarter, or because it doesn't seem to quite account for the way that ate into your EBITDA margin.

I'm sorry, I don't follow your question.

You said you capitalized $6.8 million in hand set costs this year.

Yeah.

And the cost of equipment sales was up just quarter over quarter about 4.9, am I right about by that on a lower base of -- maybe I'm not doing the calculation right.

But it seems as if that doesn't quite account for all of it.

But is that all it is, in other words --

Well, certainly we had more gross adds last year than we had this year, albeit it was fairly similar.

Last year, and although I don't have the number specifically, my guess is we probably migrated more customers to digital hand sets last year than this year, which would have accounted for more additional cost of hand sets.

But the cost of hand sets have gone down since last year which would have an impact on the amount that we would be showing as cost of sales this year as compared to what we would have capitalized last year.

Am I right that cost of equipment sales went up this year or am I -- perhaps I'm not looking at the --

Cost of hand sets would have gone up, because this year we sold the phones to our customers, and therefore the cost of the phones is in cost of goods sold.

Last year, we rented phones to customers, and we kept ownership of the phones, and therefore they would have went in to fixed assets.

No, I understand.

But you've said the total capitalized last year was $6.8 million but in this quarter alone it looks like the cost went up by about $4.9m.

It seems for a whole year's basis the $6.8m couldn't quite account for it but maybe I'm not doing my math right.

I'm really sorry, I just don't understand your question.

I'm trying to look at our balance sheet here on our P&L and the increase in cost of equipment sales went from $3.4 million up to $8.4 million, essentially a $5 million increase.

That $5 million relates to the $6.8 million that we had last year, we talked about probably fewer migrations, lower hand set cost is this year than last years,

On the GSM front, are you actively negotiating with some of your roaming partners, are you close to any agreements that we might see?

This is Ann Newhall.

Yes, we are actively talking with our major roaming partners, and why expect to have some of those relationships clarified in this quarter.

And then is there any chance you might try to do something similar to what Western did and obtain PCS spectrum from someone like T-mobile or another carrier and try to push your build out in that direction?

We have talked with every kind of expansion you can imagine with our various roaming partners.

We'll try to announce it completely when they're all well defined.

A final question on the financing issue.

Have you given thought to trying to take out some of the bank debt?

Are you interested in tapping either the high-yield market or doing other companies have successfully done second secured pieces, maybe take out some of the preferred, is any of that on your plate as well?

I think it's safe to say that we're looking at all of our alternatives and certainly those that you just indicated are things that we are looking at and potentially could be doing but we haven't made any decisions at this point in time.

Okay, thanks very much.

Thank you Ryan Langdon, please state your company name.

Yes, AIG.

Did you say you acquired towers in the quarter and if so, why was that, and you know, what was the per-tower valuation, all that sort of thing.

We didn't actually acquire towers during the quarter.

What had happened, when we closed on the Triton acquisition going on three years ago now, as a part of that acquisition, there was an option to purchase towers that had been being used as a part of their network for quite some time.

And we ended up exercising that option.

From an accounting standpoint, we had treated these towers as part of our capital expenditures -- or excuse me, part of the acquisition cost at that time, and had recorded the towers as part of our assets on that acquisition.

And the $6.5 million essentially is what we paid to exercise that option had long been from the time of the acquisition treated as a liability from our balance sheet from that point in time.

So we just ended up exercising an option.

But for all practical purposes those towers were acquired when we acquired Triton back in 2000.

I think someone asked but I didn't hear the answer, whether have you any ability after the incremental draw of 115?

At this time, we do not have any additional availability.

Obviously there's room within our existing facility for additional borrowing, given the EBITDA growth that would support additional borrowing.

Okay.

Thanks.

Phil Hefron (ph) please state your company name.

Yes, Regiment Capital.

When did you draw in the revolver and what is the cash balance?

I didn't hear your question.

When did you draw on the revolver and what is your current cash plans?

We just drew on the revolver in the last couple of days.

So that $115 million that we talked about drawing is not reflected in our cash balance.

But as of the end of the quarter, we had just over $55 million of cash on our balance sheet, so that would be added to that before any other expenditures.

All right.

So what's the current bank debt?

The current bank debt is $794 million plus 115 that we just drew.

794 is quarter end.

All right, thank you.

Anthony Carman please state your company name.

Deutsche Banc.

First question on working capital, looks like a lot of it was from ten or so million dollar decrease on the payable side.

I was wondering if that was a seasonal issue that we might see reverse itself in the coming quarter and generate a positive improvement of working capital or if that was a more permanent reduction on the payable side?

And then second, getting back to the cash question a limb bit, are there restrictions currently in place regarding the company's use of cash to buy back subordinate debt or preferred in the open market?

And obviously the amount of the draw was far in excess of the size of the swaption which is a little over $30 million on a fair market basis.

Why did you decide to draw as much of it as you did considering that if you're not going to be paying cash dividends you should be still significantly cash flow positive even after bank amortizations.

Thanks for the questions.

On the first one, working capital, I believe this is more of a seasonal situation.

At the end of the year you typically have some accruals, and in our particular case we talked about the fact that we turned up 33 sites this past quarter.

Much of the cost had been incurred in the fourth quarter of last year, and so was reflected in our accounts payable.

That's why you're seeing putting 33 sites on the air and only having the $5.6 million of CAPEX probably wouldn't be enough to do that.

That's reflected in our accounts payable at year end so certainly that's a big contributor.

I don't think that is a trend in any way or permanent reduction.

It could very well swing.

I think working capital swings from quarter to quarter.

I wouldn't necessarily read more into it than that.

As far as the use of the cash our current facility does not allow us to buy back any of the subordinated debt or any of our junior or senior preferred stock.

So that is not anticipated as a part of this particular draw.

And how --

All I can really say as far as why we drew the $115 million is reaffirm what we said previously, that we believe that we needed to have additional financial flexibility, and this was essentially what we were doing with the draw on the $115 million.

Previously, I think the covenant that had been in most people's minds had been the step down in the leverage covenant in 4Q which looks like it goes down to five times.

There is also a step down in 3Q to 2 down to 5.75.

Will you be tight on that covenant and should we expect a bank amendment before September 30th?

It's hard at this point to know when a bank amendment would happen if we're successful in getting an amendment.

Sooner rather than later, so it could happen before September 30th, but we do not believe that we have issues with any of our covenants until the fourth quarter that we've talked about.

And even then we do believe that we have the ability to be in compliance with our bank covenants.

However, as we've talked about for the last couple of quarters, the fourth quarter is when things start to get pretty tight for us.

Thanks very much.

Thank you.

At this time if you would like to ask a question please press star 1 on your touch tone phone, again star 1 if you would like to ask a question.

You may ask your question please state your company name.

Steve Wollen, I'm with Sankety (ph) Advisors.

How you doing.

My question is about can you talk about the GSM and CDMA potential build out end of this year, into next year, in terms of sort of how much you think that might cost, how that spending might be spent in terms of how much upfront, how much you know over time.

And how you expect to finance that?

Would that come out of do you guys foresee that coming out of cash on hand and free cash flow or do you foresee needing more capital to do something like that?

This is Ann Newhall.

I'll address a little bit of the process, and leave some of the number responses to Wes.

First of all, we've previously given guidance that our capital expenditures this year would be similar to last year.

We now think that it's likely we will accelerate our build slightly beyond what we previously thought and that our capital expenditures would be somewhat greater this year.

The extent of our acceleration of our build is not completely clear at this time, because we are right at this moment analyzing RFP responses that we have requested for both certain CDMA and certain GSM builds, and that decision and the refinement and timing of our plans will be finalized in the next month or so, together with our negotiations with some of our significant roaming partners.

We do, however, expect to do fairly significant builds beginning the middle of this year, through the end of 2005.

At this point in time I don't know that we can give any more guidance from a money standpoint, other than what Ann indicated, simply because we have not done a final determination as to how quickly these builds or overlays would happen.

And certainly the RFP process is still in the works.

So getting final pricing for these is something that we're looking into.

But as far as the -- how we're going to fund this, certainly the money that we have on hand at this point in time and the cash that we expect to generate over the next couple of years, we think will be adequate for our ability to fund these overlays.

Okay, thanks very much, guys.

Thank you.

Ethan Schwartz, you may ask your question and please state your company name.

Yes, Ethan Schwartz, CRT.

I just want to follow up on a couple of things.

As far as the competitive landscape are you seeing build outs by any of your roaming partners or others into your core markets?

Sure.

As I think we've said before, we certainly do see overbuilds in certain segments of our market, probably each of our regions has had some areas with some overbuilds, as our regions get more competitive, as many other areas have.

On the other hand, we continue, as you can see from the increase in our roaming minutes and our absolute dollars of roaming revenue, that we continue to be a viable and strong partner for many of the other major carriers.

Providing networks for the use of their customers as well as for our own.

And we don't expect that trend to greatly decline.

We think we're doing well in that department.

As far as the competitive environment generally --

Well, no, I actually wanted to see if I could get a bit of geographic specificity as to which of your regions seem to be showing the most encroachment and from whom.

I don't believe we've provided that information in the past.

Okay, thank you.

Thank you.

Martin Roher you may ask your question and state your company name.

Thank you operator, it is MSR Capital Management.

Question for Wes, can you give us some guidance as to what your interest trend may be over the next couple of quarters.

You do have these derivative hedges that are expiring.

How does that all net out as you look over the next few quarters?

Hi, Martin, how are you?

Good, how are you?

Good.

That is a handful of a question quite honestly.

Because as you astutely talked about, the hedges that are coming off from the book interest expense that we record certainly that is going to have a positive impact on reducing our interest expense, as we go into the second half of this year, and actually the tail end of the second quarter.

As those hedges expire, they were hedges that were put in place when interest rates were in a much different place than they are today.

And so we were actually paying out on those -- on those derivative instruments each quarter as they were resetting their interest rates.

So removing those will certainly help us and reduce interest expense.

Certainly, the continued good interest rate environment, if you're a borrower, will also help contribute to keeping interest expense.

Probably it will slightly lower than where we were this quarter, as we continue to experience the positive results of lower interest rates.

Certainly the $115 million that we've just recently borrowed will increase our interest expense, but we will also see some offsetting interest income that gets produced from that as well.

So I can't give you specific guidance at this point, Martin, but certainly those factors all come together, and I think you can make some assumptions based on those facts.

Okay, thank you very much.

Thank you.

As a reminder, if you would like to ask a question, please press star 1 on your touch tone phone.

Our next question comes from Adam Tuckman.

You may ask your question and state your company name.

Adam Tuckman, Golden Tree.

I believe I heard you say the reason for the draw down was for financial flexibility and you didn't site any specific needs for the cash.

I do believe that you said you had no intention of buying back junior securities and operations weren't suffering.

So I'm wondering from an economic standpoint why the negative arbitrage was viewed as something to do here.

And what I mean by that is drawing down on the bank facility and paying the negative cost of carry which you identified versus just paying the simple commitment fee.

Adam, I just want to clarify one thing.

You said that we did -- we have no intention of buying back any of our junior securities.

I said we weren't able to buy back any of our junior securities.

Obviously, if we had the ability do that, we'd probably be looking at that opportunity if it ever presented itself.

All I can really do is reaffirm exactly what we said a couple times already.

We felt that for a number of reasons, this was the time that we felt we needed to borrow the money to have the additional financial flexibility.

We've talked about the need for capital to build out our networks, overlay our networks.

There's some uncertainty as to how much that's going to cost and how quick we may need that money.

On top of that, the settlement of the swaption we have talked about before and the opportunity was there for us to secure that financial flexibility so we chose to do so at this time.

Okay, I guess let me qualify, because I stand corrected.

You said you're only prohibited from doing so.

I still don't understand if you had the right to draw down on the revolver, why not simply pay the commitment fee versus drawing down and paying the LIBOR spread?

One of the things, I'm sure if you look at our credit facility, you understand that we have a step down in what our borrowing capacity is after we announced first quarter or gave first quarter results to the bank group.

So that had a -- certainly a big bearing on what the availability was now versus what our availability will be within the next couple of days.

Okay.

So there was just a short window for which you could do this, then?

This was in a window of opportunity for us to security secure that financial flexibility that we were seeking.

And would you be able to draw that down post first quarter release?

No, at this point in time.

As of May 15th, we're in the second quarter, and there was a significant step-down in what we could borrow and what our leverage could be in staying in compliance with our covenants.

Thank you.

Thank you.

Jonathan Childkraut (ph) state your company name.

S.G. Cowen.

Just one item, your in collect cost per minute dropped 28%.

I was wondering if that was year over year or quarter over quarter?

That would have been on a year over year basis.

Thank you.

At this time, there are no further questions.

Thanks again for your interest in Rural Cellular.

Our employees networks systems and customers are strong, and deliver the staying power to our operations that will ultimately benefit our stakeholders.

Thanks again, I look forward to discussing with you our second quarter progress in August.

Thank you.

That does conclude our conference call.

Thank you for participating.

You may disconnect at this time.