Brightstar Lottery PLC (BRSL) Q3 2011 Earnings Report, Transcript and Summary

Good afternoon, and thank you all parties for standing by. [Operator Instructions] Today's conference also is being recorded. If anyone does object, you may disconnect. Now I will turn the conference over to Mr. Matt Moyer. Thank you. You may begin, sir.

Thank you, Suzie. Good afternoon, and welcome to IGT's Third Quarter Fiscal Year 2011 Earnings Conference Call. On the call with me today are Patti Hart, CEO; Pat Cavanaugh, CFO; and Eric Tom, Chief Operating Officer. Before we begin, I'd like to remind listeners our discussion will contain forward-looking statements concerning matters such as our expected financial and operational performance, our expectations for the economy in general and the gaming industry in particular, recent acquisitions and divestitures and our strategic operational and product plans. Actual results may differ materially from the results predicted, and reported results should not be considered as indicative of future performance. Potential risks and uncertainties that could cause our business and financial results to differ materially from our forward-looking statements are included in our filings with the SEC, including our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. All information discussed on this call is as of today, July 26, 2011, and IGT does not intend and undertakes no obligation to update this information to reflect future events or circumstances. In addition, on today's call, we may discuss certain non-GAAP financial measures. Reconciliation of these non-GAAP measures to the GAAP measures we consider most comparable can be found in today's earnings release, which is posted on the Investor Relations section of our website, www.igt.com, and included as Exhibit 99.1 to the Form 8-K, we furnished today with the SEC. With all that in mind, I'll turn the call over to Patti.

Thanks, Matt, and good afternoon, everyone. As you can see from our third quarter results, we are delivering on the commitments we have made to all of our stakeholders, with solid revenue growth, stable product margins, tightly managed expenses and an operating margin of 29%, our best in over 3 years. We believe the improvements we are driving across the organization have the potential to generate steady, attractive returns. We have adjusted our business portfolio to better align our assets with our future vision. The acquisition of Entraction is expected to enhance our interactive market position by adding poker, bingo and sports betting to our industry-leading online casino products. This is a clear example of our plan to prioritize higher growth opportunities in a responsible manner. We believe that our interactive business will be an important contributor to revenue and earnings growth in the coming years. Our agreement to sell the Barcrest Group is expected to close in our fiscal fourth quarter. This transaction will allow us to reinvest the proceeds to drive enhanced products for our customers. Strong cash generation continued to be one of the strengths of our business model, evident again this quarter. Consistent with our cash management strategy, our Board has authorized a $500 million share repurchase. We acted quickly in the quarter by applying $25 million to the buyback of IGT stock. We will continue to remain focused on efficiently deploying capital to drive positive returns for our shareholders. With that, I'd like to ask Pat to provide you with the details on our third quarter financial performance. Pat?

Thanks, Patti, and good afternoon, everyone. Our adjusted third quarter earnings from continuing operations grew 22% to $78 million or $0.26 per share versus $64 million or $0.21 per share in last year's third quarter. A table reconciling the adjusted earnings to GAAP earnings is available in this afternoon's press release. All periods presented have been adjusted to classify the Barcrest Group and discontinued operations. At a high level, the growth in earnings was driven by higher product sales revenues coupled with exceptional margin performance. Our total revenues for the third quarter increased 3% to $489 million, a result of stronger product sales in Latin America, North America and Europe combined with higher average selling prices. Gross margin for the company was 59%, up 300 basis points year-on-year, mainly due to higher performance in our North American gaming operations and growth in international selling prices. Gaming operations revenues were $267 million in the third quarter, down 1% sequentially and from the prior year. We generated an average of $55.55 in revenue per unit per day, which is up 3% compared to last year's third quarter. Strong performance for our domestic, Wide Area Progressive games positively contributed to the increase in yield. Consistent with last quarter, our coin-in per machine per day was up 13% in our Wide Area Progressive units. Average revenue per day decreased sequentially due to a higher mix of lower yield in international units. Gaming operations gross margin was 62%, up 400 basis points versus last year on improved performance and lower jackpot expense. If you remember, in last year's third quarter, we had an unfavorable move in interest rates that temporarily suppressed the margin. IGT's consolidated install base ended the third quarter at 53,300 units, which is up 800 units sequentially. Consolidated product sales revenues increased 8% to $222 million for the quarter compared to $206 million in last year's third quarter. Globally, we recognized 8,900 units in the quarter, up 7% from last year's third quarter primarily driven by higher domestic replacements and Latin American sales. North America's machine sales revenues were up 11% over the prior year quarter, to $70 million on an increase of 400 units. North America's average selling price in the quarter increased 2% compared to last year on a higher mix of new cabinets. Specifically, the new Universal Slant and the G23 Multi-Layer Display models combined with lower average discounts. North America's product sales gross margins were strong, again at 55%. International product sales revenue increased to $86 million on volume of 4,000 units recognized for the current quarter compared to $82 million and 3,800 units, respectively, in the prior year quarter. Internationally, average selling price was up 16% year-over-year primarily due to favorable shifts in product mix and foreign exchange rates. Worldwide non-machine revenues, mainly from the sales of systems conversions and intellectual property fees declined 4% to $85 million for the quarter or 38% of products sales compared to $88 million or 43% in the prior year quarter, mainly due to a large international system sale recognized in last year's third quarter. Third quarter operating expenses were $148 million, flat when compared to last year's third quarter and down 100 basis points as a percentage of total revenues. Total SG&A at 17% of revenues was also flat, compared to last year as lower bad debt expense offset higher variable compensation expenses. Cash equivalents and short-term investments inclusive of restricted amounts totaled $401 million at June 30 of this year compared to $249 million at September 30, 2010. Contractual debt obligations totaled $1.7 billion at the end of the quarter. In the third quarter, we generated $185 million in operating cash flow, up 26% compared to last year. Also in the quarter, we repurchased 1.5 million shares of our common stock at an average price of $16.25 per share. In summary, our consolidated revenue has shown good sequential growth during the year. We are generating sustainable efficiencies all throughout the company and improving our profitability. This concludes my prepared remarks regarding our third quarter results. Thank you for your time and attention, and I'll now turn the call back to Patti.

Thank you, Pat. At the start of fiscal 2011, we set out to grow and improve our gaming operations, expand our international presence and accelerate our Interactive business. We are driving the desired outcome across each of these priorities. In gaming operations, we have over 1,000 units installed on the Center Stage platform, including the recently released Dark Knight. The games that support Center Stage are performing extremely well. We expect to leverage this platform by introducing new content and themes to extend the life of the hardware. Our core products business has also elevated. We began shipping our Universal Slant product with a strong portfolio of new games. Our legendary Wolf Run game, the #1 performing title for many, many years, was surpassed by 2 titles this quarter: Golden Goddess and Black Widow, both of which are playing significantly above-floor averages. We are improving our game-development process, bringing better performing titles to market much faster, while converting more of our research and development spending to revenue. Our international organization continues to break records. Driven by strong replacement demand for our premium products in Europe and Australia, we achieved an average selling price of $16,600 in international product sales, our highest ever. While our ASPs are setting new benchmarks, our product gross margin is also healthy at 57%, a 400-basis-point improvement over last year. Early returns on our 6 new Asian-themed games are encouraging and a testament to the demand for localized content. We will continue to deliver games in greater volume that are specifically designed for our international markets. In comparison to last year, our Interactive business grew revenue over 20% and increased gross profit nearly 30%. We added Paddy Power to our growing list of interactive customers as we launched a full slate of browser-based mobile games. Initial numbers are showing a significant increase in both total wagers and average bet. I will now turn the call over to Eric Tom, who will provide further context on our third quarter results. Eric?

Thank you, Patti. Our customer-first philosophy is deeply embedded in everything we do at IGT. We solicit more feedback than we ever have, and we are using it to shape our product systems and services. In June, we hosted a Global Systems Users Conference to engage with our system customers, share best practices and showcase the latest advancement of our technology platforms. At this year's conference, which had a record attendance from around the world, we announced our open-standard Universal Game Adaptor product. This product addresses or casino customers' desire to add picture-in-picture, rich media across an entire slot floor in a cost-efficient manner. This solution allows any game manufacturer to deliver safe compatibility of their slot machines with any casino management system, a first for the industry. Staying true to our word of consistently increasing features and functionality of our system offerings, we also demonstrated several new applications for our sbX system. We expect to be delivering a steady flow of new bonus, community and game play applications in the coming quarters. Our Beijing research and development team plays a vital role in many of these applications, and our global R&D footprint will continue to be a strategic competitive advantage for IGT. In the quarter, we drove significant international system wins in Panama, Uruguay, Australia and the Netherlands. And our sbX system has now been sold on 6 continents. We have several exciting new releases in the quarter, helping drive strong demand for our products. We released the highly anticipated Hot Roll series, which features our first interactive touchscreen bonus. The brand-new Encore Progressive product is specifically designed to boost coin-in on operator's own games. Our customers can now play bank 3-level mystery progresses over their players favorite slots. Engineered and designed with customer input, the Universal Slant Top box has been also well received. Our customers love its serviceability and functionality. And the advanced design of this machine reduces its manufacturing time by as much as 50%. Exceeding our own expectations, we have already received orders for 2,300 units. In gaming operations, our convertible platforms enable us to quickly switch titles right on the casino floor in about an hour, increasing our returns on capital. In support of these platforms, we have significantly improved our game-development processes. For example, we have removed about 1/3 of the time it takes for a game to go from idea to market. This and other initiatives still to come are designed to reduce cost and increase the frequency of our successes. Our customer-first principle is at the core of everything we do and we will continue to partner with our customers in ways that will deliver deeper relationships, improve products and more consistent financial results over the long term. With that, I'll turn it back to Patti for her closing comments.

Thank you, Eric. We are very encouraged by the momentum we have generated over the first 9 months of this fiscal year. Equally as important, we have positioned ourselves to sustain and accelerate these returns into the future. With the addition of Eric Berg as our President, we have strengthened the IGT management team, with increased leadership capacity and global expertise. Eric brings the successful track record of driving improved operating results at Fortune 500 companies, and I believe, he is perfectly suited to help advance IGT's future growth. We are 75% of the way through the fiscal year, and with a solid 3 quarters behind us, we are raising our 2011 earnings guidance to $0.89 to $0.93 per share on an adjusted basis. In summary, we are generating strong operating cash flow. Improving our gaming operations and product sales businesses, harvesting opportunities internationally and continuing to execute against our plan of becoming a full-service global partner in the interactive space. With that, we thank you, and we'd like to take your questions.

[Operator Instructions] The first question comes from David Katz of Jefferies. David Katz - Jefferies & Company, Inc.: So I wanted to ask about -- understandably, the addition of -- the addition to the management team is a sort of powerful background. Can you, perhaps, elaborate just on the thought process of adding more to the senior management team and what created the need or the desire to do so? And then I have one other quick question.

You bet. Sure. I mean, I really, think, David, we're at the position at IGT, where we have for 2.5 years been really focused on the low-hanging fruit and mining a lot of efficiencies in the business. And to take the company from where we are to where I think we can be and present the kind of returns to you as shareholders, it's really the next level of elbow grease that is -- needs to be applied to the company and very, very focused on process improvement, extension of systems, increased transparency in the business, improving predictability in the business to get that top line in a position to really return the leverage that we believe is in the business when the market comes back. Eric Berg brings all of those kinds of skills and expertise to the company. Getting this company turned around has taken a lot of energy and a lot of effort. But we're on a journey. And the next level, I believe, takes more arms and legs. And so, we've added Eric for that reason. He's been with us a week and a day or so, and I think, already, is seeing the areas where he can add value to the company going forward. David Katz - Jefferies & Company, Inc.: Great. I also wanted to ask, if I may, I guess, there are more questions than answers these days about what the prospect of Internet gaming can -- what that opportunity looks like. But to some degree, we get a sense that IGT is positioned to be at least a meaningful participant in all that. Can you just talk about how you're thinking about that and how you're thinking about positioning the company as a participant in there?

Sure. I mean, we are very bullish as a company on the notion of convergence in this marketplace and the convergence for players to allow them to move from device to device over time. Our strategy and our purchase of Entraction and the work we're doing to integrate Entraction into IGT is a 100% x U.S. strategy. We're not counting on the U.S. opening. And this pencils-out based on our x U.S. work. So what you'll see us doing is expanding from casino into poker, bingo and sports betting on a B2B basis in legalized markets, likely outside the U.S. in the short term moving to the U.S. when and if those markets open. So I think, we're nicely positioned with our land-based business, coupled with the Entraction perfect -- purchase and the good work that our Interactive group has been doing on a standalone basis. Very nicely positioned outside the U.S. and positioned when and if the U.S. opens. David Katz - Jefferies & Company, Inc.: Great. And if I can just ask one detail that I think I may have missed from Pat, in the installed base, you usually give us a percentage of leased games that's in there.

Yes. David Katz - Jefferies & Company, Inc.: And I just want to make sure I have -- in the text, you talked about 53,300. Does that exclude an amount that are leased games?

It does not. And the portion that's variable on a variable pricing model [ph], David, is at 82%, consistent with where it was last quarter.

The next question is from Joel Simkins of Crédit Suisse. Joel Simkins - Crédit Suisse AG: So Patti, your product sales gross margins were very impressive. You could argue, they're probably the envy of the industry right now. I think, this is pretty strong, given we're still having fairly lackluster volumes in the business. It looks like you did take up some price. But as business improves and you start increasing that unit sales count, where do you think we can take gross margins on product sales? Is 60% unrealistic? Or am I stretching here?

Yes. I mean, if you look at the 59% gross margin that we enjoyed this quarter, Joel, it's a combination of mix, right? So there's 2 components contributing. There's really effective cost management and there's mix favorability. We believe that cost reductions are sustainable. The mix will fluctuate. It will move around as a percent -- the MLD as a percent of the overall, the regional mix. And then with the Universal Slant being introduced this quarter, that gave us a boost as well. So I believe we can continue to mine on the cost line, but the mix component of this will move around based on meeting customers' demand. So that's, I think, the way we think about it. And the mix can be the variable component between whether or not you can get to 60% or not. Joel Simkins - Crédit Suisse AG: Okay. And maybe this question -- next question's for Eric, since he talked sbX a little bit earlier. But you guys have also -- you have cobbled together a fair amount of contracts and opportunities at sbX, I think, most folks on the street have probably discounted. Are you guys monetizing anything from this technology long term? Can you just give us a sense of what you think we could see from a P&L perspective out of sbX over the next couple of years?

Well, that's a challenging question. We certainly, believe the market adoption, which is an area we've been focused on, is accelerating. Customers are asking more and more about sbX and the applications that can be deployed across sbX. And those applications, customers are focused on how they increase their marketing presence, how they actually enable the downloading, config [configure] capabilities to match content with user needs. Partly because, I think, the industry has gone through such difficult times that the -- our customer base is really focused on how to make the operation more effective, more efficient. So a lot of questions in those areas. So we believe market adoption is a big focus for us, because we're really trying to get the market to understand this is a better way to do business. And we think we're positioned for that kind of a growth, if it does happen, when the market turns that corner. So that's been mainly our focus, I think. Joel Simkins - Crédit Suisse AG: And then one final question, obviously, a lot of new jurisdictional expansion opportunities coming up in the next couple of years, practically Ohio into next year. Obviously, in the darker days of the company, market share in new openings was in the 25%, 30%, 35% range. What kind of market share would make you, guys, happy at the end of the day as you go into these new unit opportunities into next year?

We set our sight on kind of the north of 50% number on a new opening. That's to us success, given our product portfolio. So I think that's where we'll continue to set our sights, whether it's in Illinois, Ohio, Canada, wherever. It's really a new opening, or what I would consider to be a disruptive replacement of north of 50%.

The next question is from Amir Markowitz of Morgan Stanley.

Can you guys talk a little bit about some of the trends you're seeing in your domestic and install base? And I guess, over the past few years, I guess, operators have kind of tried to cut back on the amount of participation machines that they have had on the floor. What are you seeing, currently, in, I guess, some of the broad trends that you're seeing?

Sure. Amir, this is Pat. I think what we've seen as we've moved throughout this year is kind of 2 things. Stabilization and the Wide Area Progressive component that's where we had suffered previously a fair amount of degradation over the last 3 years. That appears to have stabilized. And then slightly, you're starting to see a shift in favor of Wider Area Progressive in lieu of standalone. Now that, I think, can shift quarter-to-quarter depending on what products are released, since I don't know if that's necessarily a trend, more something in our control around product mix. And we try and balance that pretty carefully, as you might imagine.

And do you have any sort of metrics, maybe, that you can share about some of the trends that you're seeing specifically in your MegaJackpots base or your Wide Area Progressive base? Maybe yields or volume or something along those lines?

Sure. I think, what we've seen is a return to more normal seasonal trends in that business, that's something we haven't seen for probably 24 months as yields continue to decline with a softer consumer spend. That appears to have come back. Some of that is probably a healthier consumer. A lot of it is we know due to better games, because we've had quite a number of successful launches, with things like American Idol, WAP, Triple Spin on the Center Stage and now, Dark Knight, I think, probably too early to tell there's only a handful of units out there, but initial results appear promising.

Yes. And I mean, this was our second consecutive quarter, where our Wide Area Progressive business, which you know, is the highest-yielding segment that we have, saw increases in all 3 areas in units, revenues and profit. So I think few quarters isn't a trend, but I think it's a good indication of not just player play rates, but also the quality of the product.

Great. That's helpful. And one final question. I think, last quarter, and maybe for the past few quarters, you're running a promotion, where you are selling some of your game ops schemes. Did that continue into this quarter? And if so, roughly how many units may have transitioned out of game ops and turned into product sales?

Amir, this is Eric. Our strategy on the sale of certain game ops has really been very selective. We've looked at revenue share gains that are in the right maturity cycle and asked our operators if they're interested in buying them. We've also looked to sell games that -- on the MegaJackpots side if they were games that didn't have the ability to upgrade very easily to new games, and would be, therefore, inconsistent with our return on capital strategy in MegaJackpots. But it has been a very selective effort, not a broad based effort at all.

And virtually, no units in this quarter, right? It was, I think, less than a couple of hundred maybe in the quarter that were really just end-of-life MegaJackpots products.

Next, we have Steven Kent of Goldman Sachs.

First question is on the international sales, how much of the pricing or sort average price increase was due to foreign exchange? And then also, on the rollout of Center Stage, is there a backlog to install new machines? Or are you just primarily changing themes now? And how do -- I'm assuming that you're changing themes, that, that become much more profitable.

Yes. So in the foreign exchange and the lift in ASPs internationally, a number of things contributed to the lift. It was regional mix. It was product line mix, and it was foreign exchange. So foreign exchange was less than half of the impact on lift and the other 2 were the balance. On Center Stage, we're still deploying Center Stage hardware. So we still have a nice backlog. There's only so much market that can install something that is the big Center Stage, but we have the 70-inch product as well. So we still have a backlog of hardware, Steve. Then we're starting to now iterate on top of the hardware that's in the market by installing new software and content as well, but have not exhausted the market as far as the placement of the hardware at this point.

Yes, Steve, to add on to Patti's comments, we also have the dual Center Stage product, which is part of that family, and then we have 70-inch, and then the big one is the 103-inch. So obviously, [ph] merchandising opportunity comes with the big Center Stage, but then our operators then move that game to the smaller units and allow it to mature on their floor, because they still have customers that follow. So the strategy seems to be playing itself out.

[Operator Instructions] And our next question is from Michael Tang of Barclays Capital.

I wanted to ask about the progress that you've made with the Universal Slant in terms of, I guess, the shipments this quarter how much of it was from the Universal Slant, how much of that is selling with MLDs and whether it's helped spur any replacements of the video poker units out there. And then tied to that, not sure if you already discussed this, but the general pricing and competitive environment, how is it domestically with respect to promotions?

Sure. Michael, this is Pat. On your first point on how many of the units shipped this quarter were Universal Slant, I apologize, we don't have that statistic right in front of us. But, I don't think it was a huge number this quarter. I think most of the number we referred to is in the backlog, perspectively. And I'll let Eric talk to what he's seeing from a standpoint of the competitive environment out there.

So the Universal Slant, we've got 2,300 units on order since we introduced it, and I apologize for not having the mix between this quarter and what we deliver next quarter. But the interest is very high. It's the first Slant in quite a while, certainly for us. The customers love the look and feel. It obviously, always helps to have great games on those -- on the hardware. And so that's, I think, for us a nice combination and what's driving the market adoption. Relative to your poker question, we have not yet put forth a real effort. We are thinking about it and looking at some of the options on how it might create a poker refresh, but that's to be determined.

And the MLD number, just generally, not as a sub-set [ph] of the Universal Slant, but with just south of 50% this quarter.

Got it. And one more question on the seasonality of domestic slot play. Last quarter or maybe for the last 2 quarters, you guys have said that the regular seasonality seems to have come back. Is anything that would make you -- in this quarter, that would have made you think that's changed?

Nothing that we can see at this point. But again, 2 quarters is not a trend make, so we'll continue to watch it as we move through the fourth quarter. And then we'll watch it as we go into Q1, because that's generally the quarter, where you see slots played declined somewhat sequentially.

Next, we have Robin Farley of UBS.

I'm wondering if you can comment on online and when you think the revenue run rate for online, including a traction consolidated would be kind of meaningful in like the 10% plus range. And do you think that requires legalization in the U.S.? Or do you think it can happen without that?

Yes. I mean, again our strategy is an x U.S. strategy and assumes fairly significant growth rates at the revenue line more importantly from a profitability perspective over the next year. 10%, I'd like to think it never gets to 10, Robin, because it's shaking our core business revenue as it grows. So that's going to be one of the challenges. As the market gets healthier in the core business, then you have to chase that up. But I don't think it's unrealistic to think in 2013, 2014, we could see this playing a significant-enough role that you all start getting more visibility into it, and again, not counting today and any of our business plans on the U.S. legalization.

The next question is from John Oh of CLSA. Jon Oh - Credit Agricole Securities (USA) Inc.: Just on the systems, a little more on that. We've seen recently that one of your competitors have received a couple of contracts. So can you just talk about whether that is solely with that competitor? Or are you also seeing that -- I know you talked about international business, but if can you just elaborate on that a little more?

Yes. I mean, we have great respect for our competitors' products, and we don't expect to win every deal. Our products are not designed to win in every single case. So we applaud that the good work of one of our competitors in serving our marketplace. So I think that's great. We've had our share of wins. We're very focused on outside the U.S. on our Casinolink product, in getting folks up to -- or everyone on a our current release of the product and putting sb on top of the Casinolink product and very focused in the U.S. as well. I think we're winning our fair share based on what our strategy is and the investment in R&D that we feel like we need to see come back in revenue for the company. Very different strategies at the 2 companies. We feel like ours is working for us. I think it's showing in the returns that we're delivering to shareholders. And our story is really about a broad portfolio of products. It's about interactive and systems and core products and Megajackpot products broadly reaching across the marketplace to serve and deliver solutions to customers as opposed to just products. So we'll continue to, I think, take that approach to the marketplace, knowing that we're not going to win all of them. But we're hoping to win more than our fair share, which, I think, the past couple of quarters have indicated we're doing.

Next question is from Darnel Bentz of KeyBanc.

I just had a little bit more detailed question on the game operations side. I know, Pat, you said overall, 82% of the units were variable. I was wondering if you could give that breakdown between domestic and international. And then I know there was a decline in units internationally, due to the Barcrest sale. Just wanted to see if you could provide some color for how that could grow from here.

Sure. And I'm going to have you repeat the second part of your question. Sorry about that. Let me focus in here. I'm getting old, so I can't see as well as I used to.

So the variability holds across international and domestic, so...

It's pretty consistent, actually.

Yes.

Pretty much 82% on each?

Yes.

Exactly.

Yes. And then if I could ask you to repeat the second part of your question?

I know there was the decline in the quarter on international game operations units due to the Barcrest sale.

Yes.

How should we think about growth rates on international game ops going forward?

Good question. I mean, if you were to compare it to the domestic marketplace, I think, the opportunities to grow the game ops install base outside of the U.S. are greater than they are inside of the U.S., given the relative maturities of the 2 markets. And that's what we've been experiencing. Where we're now in the international install base, we're over 12,000 units now, almost 13,000. And that's up year-on-year by just under 1,000 units.

Yes. I think, that you -- I mean, I think, you should expect to see units continue to grow in the international marketplace. They tend to be lower yielding, so you'll see yields on a per-unit basis a bit lower. And I think that's kind of the trend that we have seen in the international marketplace. But the profit per unit, which is what we probably focus more on here in the company continued to see that expand as well.

Are there certain regions that you feel there's greater opportunities than others?

I would say, South America, Latin America, Caribbean and Asia, which is generally, where we're focused, I would say, across the company, more so than Australia and Europe, you see the game ops side of our business expanding in those 2 regions.

At this time, there are no further questions in the queue.

Okay. Great. Well, thank you for joining us. We feel -- we're delighted actually that we've delivered solid and sustainable results, and we're pleased that you've taken time today to hear our progress report. Thanks very much.

At this time, you may disconnect. The call has ended.