Azenta, Inc. (AZTA) Q2 2016 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the Brooks Automation Q2 and Fiscal Year 2016 Financial Results Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded Thursday, April 28, 2016. I would now like to turn the conference over to Lindon Robertson, Executive Vice President and Chief Financial Officer. Please go ahead.

Thank you, Mike, and good afternoon, everyone. We would like to welcome each of you to the second quarter financial results conference call for the Brooks fiscal year 2016. We will be covering the results of the second quarter ended on March 31, and then we will provide an outlook for the third fiscal quarter ending June 30 of this year. A press release was issued after the close of the markets today and is available at our investor relations page of our website, www.brooks.com, as are the illustrated PowerPoint slides that will be used during the prepared comments during the call. I would like to remind everyone that during the course of the call we will be making a number of forward-looking statements within the meaning of the Private Litigation Securities Act of 1995. There are many factors that may cause actual financial results to differ from those identified in such forward-looking statements. I would refer you to the section of our earnings release titled Safe Harbor statement, the Safe Harbor slide on the aforementioned PowerPoint presentation our website, and our various filings with the SEC, including our annual reports on Form 10-K and our quarterly reports on Form 10-Q. We make no obligation to update these statements and should future financial data or events occur that differ from the forward-looking statements presented today. I would also like to note that we may make reference to a number of non-GAAP financial measures, which are used in addition to, and in conjunction with, results presented in accordance with GAAP. We believe that these non-GAAP measures provide an additional way of viewing aspects of our operations and performance. But when considered with GAAP financial results and the reconciliation of GAAP measures, they provide an even more complete understanding of the Brooks business. Non-GAAP measures should not be relied upon to the exclusion of the GAAP measures themselves. On the call with me today is our Chief Executive Officer Steve Schwartz. We will open with his remarks on the business environment and our second quarter highlights. Then we will provide an overview of the second quarter financial results and a summary of our financial outlook for the quarter ended June 30, which is our third quarter of the fiscal year 2016. We will then take your questions. During our prepared remarks, we will from time to time make reference to the slides I mentioned, available to everyone on the investor relations page of our Brooks website. With that, I would like to turn the call over now to our CEO, Mr. Steve Schwartz.

Thank you, Lindon. Good afternoon, everyone, and thank you for joining our call. We are pleased to have the opportunity to report the results of the second quarter of our fiscal year 2016. Q2 was an all-around strong quarter. We delivered the improvements we had forecasted, and we saw strength in our businesses across the board, including higher gross margin and profitability. Revenue increased to $135 million, up 13% from Q1, made up of a 13% increase in BPS, a 27% boost in life sciences, and a modest 2% decrease in our global services business. Entering Q3, we forecast another quarter of growth in each of our segments. In spite of this strong result, I am sure that the headlines are already highlighting an $80 million loss related to the reserve against our deferred tax asset. I am going to leave that topic for Lindon to address and I will focus my commentary on the operational results and our preparation for the future. For the past few years, we have been focused on building two strong business platforms: semiconductor and life sciences. As a means toward that end, we have purposefully double-taxed the strong semiconductor business. We have reinvested in semiconductor new product development and entered critical new market segments that enable growth, even in a market that is consolidating and slowing. In this endeavor, we've been very successful, as demonstrated by the rapid growth in our vacuum automation segment, fueled by the acceleration of deposition and etch process steps, and compounded by our share gains with all Tier 1 and most Tier 2 OEMs. We have also grown the combination of backend advance packaging and contamination control solutions from less than $10 million three years ago to more than $85 million this year. In addition, we used the profits, cash, and even our technologies from semiconductor to support the build out of our life sciences growth platform. It has been a few years in the making and has required much patience were shareholders, but we believe that the payoff begins now. In Q2, we crossed an important threshold by getting life sciences to a $100 million annual run rate. This is now a business of meaningful size and growing even faster than our high-growth semiconductor segment, and we expect it to grow more steadily and with less volatility. We made effective use of our assets to create a solution to the cold chain sample management problem, which has plagued the life-sciences field since the inception of cold sample storage. In doing so, we have created a market for standard and reliable solutions that heretofore did not exist, as every institution solved this problem in a different way. With our current product solutions and our critical mass, our life sciences group is now positioned for success, and we are keenly focused on the growth and profitability of this business. We recognize that it may seem curious that, at a time when we are heading into a period when we can most afford to carry the infrastructure they got us to this point, we are taking such aggressive actions to restructure the company. But the actions we implemented were very deliberate in the reshaping of a more efficient and profitable company. As we have a life sciences business that can stand on its own, we no longer need to have as much support built into the infrastructure of the company. We have an experienced and talented management team and strong product and market positions. Our leaner and flatter organization will allow us to deliver these capabilities with better efficiency and lower cost. I will now turn my comments to specific results from the quarter, and I will give some color as to why we are positive on our outlook and our prospects in the exciting semiconductor and life sciences segments that we serve. In semiconductor, our business rebounded nicely from December, which was consistent with the strong market share and growth trajectory we reported on our last call. Overall, our semi business was up 17% in the quarter, with the front end up 18% and back end advanced packaging up 10%. The front-end business was led by a rebound in vacuum robots and vacuum systems, primarily driven by the numerous OEMs we supply with automation for deposition and etch platforms, as 10 nanometer production begins to ramp. Additionally, our market share gains continued as we added another very significant win from a top five OEM, who confirmed us as the vacuum robot supplier for their CVD product lines. This win replaces yet another in-house design that had been their standard for more than a decade. That same customers has already challenged our engineering design team to meet the specifications for their next etch platform, as it is the last of their robots we have not yet won. Our back end advanced packaging business delivered just about $9 million, another record quarter, that was driven by a significant number of tool deliveries that are now installed in TSMC's Info line. Our strong product position with more than 25 equipment makers who serve the advanced packaging market continues to make this a significant growth opportunity for the company. Specifically, our ability to robustly handle non-traditional substrates including transparent, translucent, rectangular, and non-flat substrates has positioned us to be the preferred supplier of automation in this space. Although we see some decrease in advanced packaging in June, we are nonetheless well-positioned for a subsequent expansion of advanced packaging capacity that we anticipate will come online before the end of calendar 2016. In our contamination control solutions business, our shipments were up but our revenue was down to the timing of sign-offs that we expect to close in the current quarter. Nonetheless, we had another strong quarter of product acceptance as we received tool-of-record qualification for a FOUP cleaner for another 10-nanometer fab application. And we received orders for three tools that are planned to be installed in a 7-nanometer pilots line before the end of this calendar year. The penetration of our technology continues to advance, as we are now solidly in Taiwan, Korea, China, the US, Europe, and Japan. We have just begun to win business in high-volume memory fabs, and we see the continue trend for more of our CCS technologies with each smaller device node. We forecast that the second half of this fiscal year will be very strong, led by capacity build out for 10-nanometer fabs, as well as more Tier 2 foundry capacity in China. One more item of note that relates to the future of our CCS business is the potential for the adoption of EUV lithography, where contamination requirements around a very expensive mask sets are more stringent than ever and require the special handling and storage of both EUV reticles and reticle storage containers. We are not forecasting timing for the adoption of EUV for high volume production at any time in the near future, but I do want to emphasize that we have already developed contamination control solutions products that meet the demands of this critical technology. To date, we have designed, built, and installed five automated EUV reticle pod cleaners at five different customer sites and we've installed three automated EUV reticle stockers at three sites. The field performance of these EUV products gives us high confidence that if and when EUV becomes mainstream, we have already demonstrated our ability to serve this opportunity well. I would now like to give an update on our life sciences business. Q2 was one of strong accomplishment, as we have really begun to hit our stride. Revenue was $26.5 million, up 27% from December, and gross margin jumped more than 800 basis points to 38% on all around strong operational performance, as we begin to see the full impact of our structural improvements. Additionally, as we'd forecasted, we reduced our operating loss from this segment by half from the prior quarter and we have line of sight to more improvements in growth throughout the year. I would like to give some specific highlights from the business. Including BioStorage, we had new orders of $38 million. Included in this number was the largest contract in the history of BioStorage, a multi-year deal with one of the largest pharma companies in the world. The business includes the full breadth of services that we offer. We added 16 new customers in the quarter that support the expansion of our BioStorage service, cryo-automation, and consumables offerings. We recognized revenue on our first B3C automated cryo systems, and although we came up short of our target to recognize $1 million of revenue in the quarter, all of the customers who were part of that target are expected to close this quarter. And we are ramping production to be able to meet demand that is beginning to build for shipments later this year. We installed our first B3C product in our BioStorage site in Indianapolis, and by doing so, we have added automated storage and retrieval at minus 190 degrees to their services offerings. The BioStorage team is also in the planning stages to add a Twinbank BioStore into Indianapolis as well, to continue to build out the breadth of services offerings in their portfolio. And for the second year in a row, we received the new product innovation award at the Annual Meeting of the International Society of Biological and Environmental Repositories, which was held earlier this month in Berlin. This time our winning product was the TempAura, a product in our informatics product line that provides wireless, integrated, remote tracking and monitoring of temperatures of samples within and across bio-banking facilities. We are already taking orders and shipping this product, which generates a subscription-based revenue stream. We had a very strong quarter in life sciences business. We can feel our momentum and we are confident that our strong and complete product and solution offering is known and respected in the customer base. We are positioned to offer the best solutions to customers who have needs to manage samples both onsite and remotely. Our increasing backlog of orders gives us a strong recurring revenue stream in the form of storage services, consumables, and onsite large store service agreements, and is the key to stability of our future earnings. This takes us to our outlook for Q3. We expect revenue to be up approximately 4% to 10% and EPS to approximately double on a non-GAAP basis. We forecast another increase in our semi business in the June quarter, driven by 10-nanometer and 3-D NAND build-outs. And though we do not have a good visibility beyond about one quarter, we are receiving indications that we can expect more growth in the second half of the year. In life sciences, our momentum remains much the same as we outlined on our Q1 earnings call. We forecast revenue to be at least $30 million, and despite some continuing FX headwinds, we are aiming to get the business to be breakeven at the operating line. Looking further ahead, we forecast another double-digit percentage increase for the September quarter, and with that, the beginning of steady and growing profitability in the life sciences business unit. To put a cap on the last few years, our semiconductor business is strong and getting stronger. What's more is that the portfolio is solidly geared around the critical growth spaces where we provide highly differentiated value: vacuum automation, contamination control solutions, and back end and advanced packaging solutions are all high-growth, high need, highly differentiated technology areas. We serve these growing market segments with an exceptionally talented team and we have tremendous market traction. The semi business remains a profitable, strong cash generator with more upside because of the specific segment which we have targeted. In parallel, we will continue to build the life sciences business, as there is tremendous upside opportunity for a company that is solving unmet needs in a gigantic new market. And we are bullish about the prospects of adding the second profitable, cash generating engine to our strong semiconductor business franchise. That concludes my prepared remarks and I will now turn the call back over to Lindon.

Thank you, Steve. Please refer now to the PowerPoint slides available on the Brooks website under our investor relations tab. I draw your attention to Slide 3, which is a consolidated view of our operating performance to start the remarks. Top-line revenue increased 13% sequentially to $135 million, driven by improved demand in the semi industry and a full quarter of revenue contributions from the completed BioStorage acquisition. For earnings, let's address the GAAP results first. Gross margins improved, and both R&D and SG&A expense lines were reduced. Driving the GAAP bottom-line loss are really two events in the quarter. First, as announced on March 7, we have restructured the business significantly, removing executives and employees and changing our management structure. The decision to do so was predicated on the readiness and capability of each segment to move forward with less oversight. We foresee no negative impacts to our offerings or revenue. In fact, we believe our customers will benefit by more integrated sales and service management team that is already living a daily discipline of meeting the customer needs. In the quarter, we took a $7 million charge in the restructuring line and expect approximately $16 million of annual savings from the reductions. We saw approximately $1 million of this benefit in the second quarter results, and expect $2 million of incremental savings in the coming third quarter. As we enter the fourth quarter, the full run rate of savings will be in our results. The second impact is on the tax provision line. We increased the reserve against all remaining net US deferred tax assets on our balance sheet as of March 31 by approximately $79 million. As a result of the restructuring charge that we took in the quarter, the second quarter yielded a loss for the company, and most notably in the US, where we hold most of our deferred tax assets. As we review the recent years of US income, the reported earnings of the company do accumulate to a profit. However, when we remove the profits of the discontinued operations which we sold in 2014 in order to invest in new businesses, the current losses were enough to swing the resulting evaluation to a cumulative loss. GAAP requires we put more weight on this historical loss than on the positive forecast going forward. I emphasize that our evaluation of those forecasts continue to indicate positive and robust profits going forward. While it is appropriate for us to reserve the US deferred tax assets, it does not prevent us from using those assets as we generate profits going forward. This results in lowering our expected effective tax rate immediately and brings it more in line with our cash tax rate, which we've enjoyed for quite some time. I will say more about this as we share our guidance toward the end of my remarks. Let's now discuss the non-GAAP picture briefly. Just as in the GAAP results, we see improved gross margins, lower R&D expense, and lower SG&A. At the bottom line, we produced $0.07 per share. I highlight that the operating expense carries a benefit of $1.7 million from the reversal of incentive compensation accruals for the employees separated. If we exclude this benefit from non-GAAP earnings, we saw $0.05 of diluted earnings per share, a $0.03 improvement to the first quarter. Let's now turn to the segments and look deeper into the non-GAAP results. Page 4, you can see the breakout of segment revenue. The 13% sequential increase this quarter is primarily attributable to a 27% increase in life sciences, and a 13% increase in our product solutions line. We are really pleased with this revenue performance, as it is evident that our customers continue to see deep value from each of our segments. Let's turn now to Page 5 and look into the product solutions segment. As I mentioned, Brooks Product Solutions increased 13% in total. Underneath this total, the revenue for automation systems and robots grew 25%, driven by high order rates for vacuum systems, atmospheric systems, and vacuum robot customers. We also saw growth in the vacuum pump line. Softening the ramp was a drop in contamination control solutions, where the timing of final customer acceptance of some shipments held us back from very similar growth rates. Our Polycold line also saw a decline, with less demand for refreshing tools in the glass-coating process for the smartphone market. Gross margin was down 60 basis points from the prior quarter. The automation products that did contribute margin strength on favorable net absorption, but the dynamics in Polycold included some unfavorable absorption, as well as some inventory reserves. In total, margins were a bit softer than in the first quarter. You can see on Page 6 that our global services revenue decreased 2% from the prior quarter. As a result of the repair services delivered, volumes were stable, which drove normal material costs. But the mix of services provided drove average pricing downward. Gross margin declined 5 points to about 29% in the quarter. Let's turn on to Page 7. As Steve has described, life sciences saw a number of highlights this quarter. Revenue grew 27% to $26.5 million. We were pleased to see the legacy business grow 4%, with new revenue beginning to pick up from the strong bookings in the first quarter. And BioStorage provided $11.4 million revenue on a strong quarter of registrations for new samples. Within this revenue, the genomic services, which had a negative mix impact back in December, was less than 20% of the revenue this quarter. When you consider this more closely, you will see that the run rate of BioStorage already exceeds a $45 million annual business, and that is with a low amount of the genomic transactional services. Compared to the revenue, new contract value signed by BioStorage in the quarter more than doubled this revenue amount. The momentum of life science business is good, and it is in line with our expectations. We expect to see this segment hit $30 million in the third quarter. Gross margin expanded this quarter, 8.4 basis points to 38.5%, which as I said, include BioStorage benefiting from a favorable product mix. We still expect life sciences gross margins in the 37%, 38% range this coming quarter. Finally, we told you last quarter that we had would cut the operating loss in half, and indeed we did. Going forward, we expect this business to show profits by the fourth quarter. On Slide 8 you will see the balance sheet. The change in the stockholders equity line was substantively driven by the reduction by the reduction in the deferred tax assets. The $6 million increase in deferred revenue reflects both the payments received from life sciences store systems and the delivery contamination control systems which were deferred due to timing of final customer acceptance. Cash and marketable securities expanded to $68 million, which is a good lead-in to the cash on Page 9. Operating cash flow for the second quarter of fiscal 2015 increased to $12.8 million. The change in operational working capital, which includes the increased deferred revenue referenced on the balance sheet, drove $11 million cash benefit in the quarter. We invested $4 million in CapEx, and continue to pay out $7 million in dividends, while increasing that cash balance to the $68 million level. Now, let's turn to Slide 10 and we will wrap up our remarks with some guidance. We saw strong operational performance in the second quarter, and we took actions which make us more profitable going forward. In terms of headwinds, I remind you that the second quarter contained $0.02 benefit from the reversal of incentive compensation accruals. But the tailwinds supporting us are significant. We will see approximately $2 million of incremental benefits in the reduced structure in Q3. Our non-GAAP tax rate is expected to remain in the 15% to 20% range for the rest of the year. And the revenue line carries momentum on both, the semi and life science business, with expectations to land in the range of the $140 million to $147 million you see on the chart. We see EBITDA expanding into the $14 million to $18 million range, and the non-GAAP earnings per share in the range of $0.10 per share to $0.14 per share this coming quarter. That completes our prepared remarks. I will now turn the call back over to Mike, our operator, to take some questions from the line.

Thank you. [Operator Instructions] One moment please for the first question, which comes from the line of Patrick Ho with Stifel Nicolas. Please go ahead.

Steve, first on the semiconductor side, with your contamination control business, typically I think the initial penetrations would be leading edge logic and foundry customers for that product. On the memory side of things that you mentioned, are you seeing a bias towards DRAM or 3-D NAND initially?

Patrick, thanks. At the moment, we just got informed that we won some time that business, actually. So we have some manual tools still in DRAM fabs, but automated tool now heading to 3-D NAND.

Right. On the life sciences end, with the BioStore III product and you talked about many evaluations that have hit since the beginning of the year, now you're going to start seeing some the revenues come in over the next few quarters, can you give a little color of the type of customers that initially took those systems? And where are you looking to expand from a customer base off of that initial penetration?

We put the first tools in eight different kinds of customers, if you will, Patrick. So this is bio-bank, pharma companies, biopharma, university, and even a veterinary research hospital. So we wanted to make sure that we could sample different kinds of customer environments. I think the feedback has been strong from all of those. We anticipate that some of the build-out will be for the bio-banks that store tissue samples. So we think the initial penetrations will be for people who really need to store below minus 150 degrees C, and we anticipate that those will be for biopharma companies and for some of the tissue banks.

Great. And maybe just as a final follow-up off of that question and answer, typically new products have lower margins, just because you are trying to get the initial penetration. You've got some higher warranty costs. As you start hitting volume with some of these initial customers, can we expect to see margin improvements with BioStore III that will obviously translate positively to the life sciences business?

Right out of the chute, Patrick, we think these are good products. So from a margin standpoint, all the tools started up in a day, each of them. They are modular, almost appliances, so they have been very dependable so far. So we don't think we will have surprises from a field standpoint. And the price and the cost we think will contribute positively right out of the chute.

Great, thank you.

Thanks, Patrick.

The next question comes from the line of Farhan Ahmad with Credit Suisse. Please go ahead.

Thanks for taking my question. Can you just remind us again, how do you expect the profile of profitability to improve in your life sciences?

I'm sorry, how the line of profit -- could you repeat the question?

The profitability -- like, if I remember correctly, you had guided last quarter that second half of this fiscal year you expect to be profitable. And I just want to get a sense of do you still maintain those targets of the new growth in life sciences and profitability growth?

I understand, thanks, Farhan. In life sciences, we had described that we would be hitting breakeven in the third quarter and that we would be hitting a positive profit at the operating income level in the fourth quarter. By the way, behind that, we said that in the second quarter we would reduce our first quarter loss in half. So our first quarter loss, $4.2 million, and then this second quarter, we brought that down to $2 million, and in fact we cut it in half. And we believe we are very much on track in the second half. And I will say this, I think we have very clear line of sight to profit in the fourth quarter. And we are seeing exchange rates move from the time that we had that call last time. So we are just going to be a little nip and tuck if we get all the way to breakeven in the third quarter. But that is still our target in the third quarter to get to breakeven.

Got it. And then in terms of your legacy business, it was only $10 million of new orders in the quarter. Seems a little bit light relative to your historical level. So what's going on in your legacy business in life sciences?

Yes, Farhan, I think it's a really good question. And keep in mind that the first quarter we had $30 million in the first quarter. So combined for the first half $40 million, and it is a lumpy business. But what we are seeing is, as we focus on the model of the business, the consumables business and the services business is quite stable. And again, the storage business, very lumpy. And a bit more up-and-down than we would like to see that we are comfortable. But as you started to see, as I mentioned, we had 4% revenue growth this quarter because we're building some of those systems now. And we are seeing really good customer satisfaction out of these systems that are going in from last year. So we remain very confident in that legacy business. 40 million orders year-to-date. And I understand -- and we put it out there for you. We try to be very transparent with this 10 million. But then I draw your attention to the fact that we had another $28 million of bookings out of the BioStorage business. So we had $11 million of revenue there, but $28 million of new contract value. Now, that's a different kind of contract value, because it goes out over a number of years in terms of storage. But again, very revenue steady revenue coming forward.

Farhan, I will add that even though, as we know, the large store business is pretty lumpy, it is quite unusual that there would be no large stores awarded in a quarter. So some of the things that we are tracking pushed, we believe, into the current quarter. And again, unusual, but as Lindon said, big quarter in Q1, low in Q2, and we are still facing a very healthy pipeline.

Got it. And one last question on the semi side. Your orders there in your BPS and services declined quarter on quarter, and your commentary is second half revenue was unlikely to grow. So I just wanted to ask, is it reasonable to expect that September revenues might be flattish, maybe up slightly, just because the orders declined sequentially?

Actually, the decline was very, very modest in the orders, quarter to quarter. But as we referenced in my remarks, the contamination control systems, this is an unusual -- in our industry or in our business. But we saw some of the revenue in this quarter that we had a shot at delivering. We ended up not taking this quarter. This is not our choice; and we look to the criteria of GAAP. And some systems required final customer acceptance. So we shipping a little more and some of that revenue is going to be delivered -- or I should say be recognized in the coming quarter, presuming that we have customer signoffs, and we will, I'm sure.

Got it, thank you, that's all I had.

The next question comes from the line of Edwin Mok with Needham and Company. Please go ahead.

Hi guys, this is Arthur [ph] calling in for Edwin. Thanks for taking our questions. The first one is on your commentary on advanced packaging. Saw that it was up 10% this quarter and that you expected a modest decrease in the June quarter. So you had some confidence that advanced packaging would be ramping back up into the second half of calendar 2016. Just kind of want to get an idea of what you're seeing in the marketplace, and what is going to drive that growth in that segment.

We know that the TSMC line took a lot of capacity, and so it's understandable that a lot of us shipped product into advanced packaging. So necessarily, we think June will be down. But we believe before the end of the calendar year that there will be some more capacity put in, in Taiwan and perhaps in China as well.

Okay, thanks for that. And then within your life sciences group, you built up a good portfolio of life science products. Just wanted to get an idea of where you are seeing the strongest demand, and where do you think there are some other areas that could drive additional growth?

On the life sciences side, a lot of the -- a majority of the samples that we store in BioStorage are from North American based pharma companies, biopharmaceutical companies, research institutions. So a majority of that business is right now North America based. We've expanded BioStorage facilities in Europe and in Asia, two different sites in Asia. So we have the capability and capacity to continue to expand. And we are seeing growth from all of those regions. But the majority of what we will recognize here, based on the orders that just came in, will come from North America. From a storage and consumables standpoint, those are distributed around the globe. Most of that is in Europe and North America. But the first of the BioStore III cryo systems that we shipped actually went to China. So we are seeing expansion just about everywhere that life sciences people see growth in their business. We participate as well, because there's samples used in all of the research studies that are going on.

Great, thanks for that. And last question is just on the services business. I saw that gross margin came in a little bit. Just wondering, is this just a one quarter blip, or can we expect gross margins to return back to this mid- to high-30% level? Thank you.

Yes, Arthur, I have always said that right average expectation is around 35% to 36%, and I still maintain that. When our revenue is at this level, down in the 22 range, it is going to typically be down in this -- below the 35% range. And it swings pretty quickly if you drop down to this level. And when you are up in the 23.5 and better, you find yourself up in the 36%, 37% range. So I would think for modeling purposes, this is really steady business for us, a little bit light this quarter but I would suggest the right model is to figure an average of 35%.

Thank you.

There are no further questions at this time. I will now turn the call back to you. Please continue with the presentation and/or closing remarks.

All right, Mike, thanks very much. And everyone, we really appreciate the time and the coverage we get from our analysts as well as the interest from our investors. We always invite you to our call and to arrange time with us offline as well. And we will make sure that we service the research that you need that's available in our public domain. So thank you very much and we look forward to seeing you at the end of next quarter.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.