Good day, ladies and gentlemen, and welcome to the Core Laboratories Q2 2019 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] I would now like to turn the conference over to David Demshur. Please go ahead.

Thank you, Chris. Good morning in North America, good afternoon in Europe, and good evening in Asia-Pacific. We would like to welcome all of our shareholders, analysts and most importantly, our employees to Core Laboratories second quarter 2019 earnings conference call. This morning, I am joined by Chris Hill, Core's CFO; Gwen Schreffler, Core's Head of IR; and Larry Bruno, Core's President and COO. The call will be divided into five segments. Gwen will start by making remarks regarding forward-looking statements. And then we'll review some of the current macro environment, updating industry trends pertaining to Core Lab's expected future performance. And then some current thoughts on worldwide crude oil supply trends. We will then review Core's three financial tenets, which the company employs to build long-term shareholder value. Chris will follow with a detailed financial overview and additional comments regarding building shareholder value, followed by Gwen discussing Core's third quarter 2019 outlook and a general industry outlook as it pertains to Core's prospects. Then Larry will go over Core's two operating segments, detailing our progress and discussing the continued successful introduction of new Core Lab technologies, and then highlighting some of Core's operations and major projects worldwide. And then, we will open the phones for a Q&A session. I'll turn it over to Gwen for remarks regarding forward-looking statements. Gwen?

Thank you, David. Before we start of the conference this morning, I'll mention that some of the statements that we make during the call may include projections, estimates and other forward-looking information. This would include any discussion of the Company's business outlook. These types of forward-looking statements are subject to a number of risks and uncertainties relating to the oil and gas industry, business conditions, international markets, international political climate, and other factors including those discussed in our 34 Act filings may affect our outcome. Should one or more of these risks or uncertainties materialize or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For a more detailed discussion of some of the foregoing risks and uncertainties, see Item 1A Risk Factors in our most recent Annual Report on Form 10-K, as well as other reports and registration statements filed by us with the SEC and the AFM. Our comments include non-GAAP financial measures. Reconciliation to the most directly comparable GAAP financial measures is included in the press release announcing our second quarter results. Those non-GAAP measures can also be found on our website. With that said, I'll pass the discussion back to Dave.

Thanks, Gwen. Now some industry trends and then onto our three financial tenets. Core is encouraged that operating companies are furthering their commitments to operating within their own free cash flow and emphasizing returns on invested capital as demanded by today's investors. This trend benefits Core, whose clients tend to be technologically sophisticated and are heavy users of technology over commodity-driven solutions. During the second quarter, Core continued to host several conference calls, industry sessions and industry groups and analysts to discuss optimal well spacing, rightsizing, upsizing, well positioning and parent-child well relationships. Proper upsizing and well spacing are two of the most discussed topics within Core's clients today. Also improving perforating efficiencies and effectiveness rank a close second. Larry Bruno will have a detailed discussion of Core's recent commissioning of the industry's most advanced Reservoir Optimized Completions laboratory or ROC Lab. To that end, the industry will continue to add perf clusters per stage, yielding less but more complex stages, while lateral lengths or nearing their maximum length owing to frictional forces. Perf clusters are now increasing to as many as 15 to 20 per stage reducing the cost and time for well completion and stimulation programs owing to the lower stage count. The reasons for more perf clusters and fewer stages are our clients are changing the way reservoir rock is being stimulated to produce the maximum amount of stimulated reservoir volume within close proximity to the wellbore. Long frac channels are to be avoided as they are the source of well interference. It is possible to rebelize more stimulated reservoir volume in the near wellbore region and avoid costly well interference problems using more perf clusters. We see this trend continuing. Adding a new and growing -- addressing a new and growing market, the recent acquisition of…

Thanks, David. The guidance we gave on our last call and past calls specifically excluded the impact of any FX gains or losses and assumed an effective tax rate of 20 %. So accordingly, our discussion today excludes any foreign exchange gain or loss for current and prior periods. Additionally, we have excluded the gain of $1.2 million on the divestiture of a non-strategic business and a $3 million charge associated with the company's efforts to streamline our operating structures and business reporting lines as part of a company-wide cost reduction program. Now, looking at the income statement. Revenue from continuing operations was $169 million in the second quarter, comparable to last quarter, but below the same quarter last year. Of this revenue, service revenue was $117.9 million for the quarter, down 2% sequentially. This quarter's activity was impacted by lower than projected service revenue in North America and with the reduction of almost $2 million in revenue associated with the divestiture of a non-strategic business in Asia-Pacific. However, the impact from these items was partially offset by increased activity from international and offshore projects, which is anticipated to continue improving into the second half of 2019. Product sales, which are tied to North American activity were $51.2 million for the quarter, nicely up 5 % from last quarter. The growth in product sales for the quarter was led by our US energetic product sales, which grew 18% this quarter. Moving on to cost of services for the quarter are 73 % of service revenue, down from 75% in the previous quarter, due to improved operational efficiencies. Cost of sales in the second quarter were 75% of revenue, down slightly from 76% in the previous quarter due to improved absorption of fixed costs. G&A ex-items for the quarter was approximately…

Thank you, Chris. During the first half of 2019, the global crude oil market stabilized with the continuation of OPEC production cuts and a modest decline in global crude oil inventories, supporting a balance between supply and demand. The most recent International Energy Agency report estimates demand growth for 2019 will be 1.1 million barrels per day, slightly down from the first quarter of 2019. Also during the second quarter, the international offshore rig count increased by 26% year-over-year and the overall international rig count increase by 14.5% year-over-year. While market concerns exist regarding the balance of future crude oil supply and demand, crude oil production additions are limited on a global basis. The decline curve is prevailing in the mature crude oil fields internationally, heading towards a supply GAAP over time. These crude oil fundamentals drive Core's clients' international activity levels, which are expected to continue to improve in the third quarter of 2019. The balancing of crude oil supply and demand supports the crude oil price which underpins the Final Investment Decisions and emerging international crude oil field reinvestments. These international investments are critical, as the decline in production from mature fields continues and new field development is required for supply replacement. Consequently, Core's accepts the Reservoir Description segment to benefit from increased client spending in the international crude oil markets. The average third quarter 2019 US rig count is projected to be down. While operators continue to focus on generating free cash flow and returns on investment, optimizing well completions remains a significant lever in growing field investment returns while managing their capital budgets. As a result, Core projects US onshore completion activity to be flat sequentially. Core would expect US energetic sales to exceed the rate of completion activity, as they did in the second quarter of 2019. Therefore, we expect consolidated third quarter 2019 revenue of approximately $171 million to $175 million and operating income of approximately $30.6 million to $32.6 million, yielding operating margins of 18%, with incremental margins, ex-items, exceeding 50%. The Company's EPS for the third quarter of 2019, using an effective tax rate of 20%, is projected to be $0.48 to $0.52. Core Lab's third quarter 2019 guidance is based on projections for the underlying operations and excludes gains and losses in foreign exchange. To summarize, the following assumptions were used to provide third quarter 2019 company guidance. The international recovery is expected to continue benefiting the international revenue generated by Reservoir Description. Third quarter 2019 US rig count is projected to be down. However, Core projects US onshore completion activity to be flat sequentially. And we would expect US energetic sales to exceed the rate of completion activity as they did in the second quarter of 2019. And lastly, the potential North American market challenges that may affect both business segments. With that said, I'll turn the call over to Larry.

Thanks, Gwen. First, I'd like to thank our global team of employees for providing innovative solutions, integrity and superior service to our clients. The team's collective dedication to servicing our clients is the foundation of Core Lab success. Turning first to Reservoir Description. During Core's 2019 Q1 conference call on April 25, Core announced that it was engaged in the analysis of over 700 feet of conventional Core from the Talos Energy Zama-2 Well located in Block 7 of the Sureste Basin, in the Gulf of Mexico. In the second quarter of 2019, Core Laboratories under the continued direction of Talos Energy provided similar services, unconventional core from a second well, in this offshore Mexico project, the Zama-3 delineation well. Over 700 feet of conventional core was captured from the Zama-3 well with 99% recovery breaking Talos' own record for the longest conventional core from a single well in the history of offshore Mexico. Previously established workflows, including proprietary, core preservation and stabilization techniques developed by Core Lab for a wide range of sandstone reservoirs in the US portion of the Gulf of Mexico were again successfully applied. Upon arrival in the laboratory, the Zama-3 conventional core was immediately scanned using Core's proprietary non-invasive dual energy CAT Scanning and high-resolution spectral gamma ray detectors. These surface logging technologies provide Talos Energy with lithological data and a wide range of critical parameters for pay assessment well in advance of time-honored laboratory analytical methods. Advanced laboratory analysis is ongoing. Talos will use the data sets provided by Core Laboratories on the Zama-2 and Zama-3 wells to calibrate models that will ultimately provide reliable calculations of recoverable resources on what Timothy Duncan, Talos, President and CEO, had described as a globally recognized asset. Core Lab continues to be pleased to be part of…

We will take questions now.

Thank you very much. [Operator Instructions] Our first question is from Chase Mulvehill with Bank of America Merrill Lynch.

Good morning. I guess first question, if you could just talk about the 3Q outlook, in particular on the production enhancement. It sounds like, there do you all think that completions will be flat and energetics will outperform that? So if we think about revenues for production enhancement in 3Q, should we be thinking about those revenues being up or kind of flattish?

Think those are going to -- Chase, this is Gwen. I think those are going to be somewhat flattish. And on the energetics, we would owe that to penetration with existing customers as well as adoption with new customers and the new technology. That's having a flat completion activity sequentially and then more energetic sale.

Okay. And on the energetics and the GoGun in particular, because you kind of quantify if you could maybe the penetration that you've gotten so far, maybe kind of -- what kind of market share that you think you have on the preassembled guns and really, what differentiates your GoGun versus everyone else's?

So yes, Chase. It's still very early innings of the introduction to GoGun into the market. And I think, so it's a -- we're still in a ramp up phase on that. I think the important point is the differentiator is ultimately the energetics. We can deliver -- and other companies can deliver a convenient package to the well site in terms of the preassembled gun, but ultimately, it's the efficiency and effectiveness of the energetics that are the determining factor. That's what drives people to Core Lab's offerings.

Okay. Right. That's helpful. The quick follow-up here on Reservoir Description, obviously a good quarter and nice rebound in margins. Could you maybe just talk about the back half of the year and, FIDs that seemed them [indiscernible] possibly be kind of coming through in the back half of the year. So what kind of year-over-year growth? When do we hit that 10% mark on year-over-year growth for Reservoir Description and what about that 20% EBIT margins? Do you think that's plausible by the end of the year for Reservoir Description?

Okay. Not quite ready to give full year guidance here, but our view right now is that, we'll see improving margins in the third quarter and further penetration of this rebound in the international market?

Yes. We have to caution though Chase because we do generate some Reservoir Description revenue in North America, so that's kind of offset some of the international impact. Right now, we do see international growth at 8% or some of that was offset by some decrease in North America. So I think that's the watchword. If you can hold North America flat in Reservoir Description, I think we get to that 10%, certainly high-single digits, maybe as early as next quarter.

Okay. All right. That's helpful. I'll turn it back over.

And on margins, Chase, I think we're looking at 18% next quarter, so we could be knocking on that door fourth quarter.

All right. Good to hear. Thanks, Dave. Thanks.

Thank you, Chase.

Thank you. The next question is from Byron Pope of Tudor Pickering Holt. Please go ahead.

Good morning, everyone. For -- within the production enhancement, so clearly the energetics demand continues to trend in the right direction. I was just wondering if you could give some color on the discretionary services where there were some headwinds in Q2. And just trying to understand that dynamic as you think about the back half of the year because again, realized energetics demand will continue to trend in the right direction.

Byron, so on the services part that is a fairly discretionary service that is diagnostic services that represents about a third of the production enhancement segment. So we did see somewhat of a decline in the North America part of that business.

Okay. That's helpful.

I'll add to that. Byron, I'll add to that, there's some very nice opportunities for our completion diagnostics in offshore field development programs. And so, as those improve both offshore US and internationally, we see that providing some support for completion diagnostics going forward.

Okay. That's helpful. And then that's a good segue to my next question. Just thinking about international across both business segments realize it's more skewed toward Reservoir Description, but I recall correctly that Europe, Africa, Middle East region is your largest international region. And could you just frame the growth prospects that you see there over the next 12 months?

Yes. I think the Middle East is, I think I mentioned last quarter, I still hasn't changed views on. I still see the Middle East as a sort of a -- on the forefront of the international recovery. We've seen some nice things developing -- continuing and developing in South America for us offshore primarily and so maybe, I think, still think the Brazil opportunities for us are largely a 2020 event. But for the back half of this year, I think the Middle East is leading. We've got a very nice project going on in Australia as well. I say, Asia-PAC not quite as mature than recovery as the Middle East and South America ongoing work continuing in a very nice clip and some new opportunities emerging for us into 2020.

Great. Thanks.

Byron, just to add to that, looking at, we would rank growth prospects Middle East the number one, and Latin South America number two at this point and Asia-PAC third.

Thank you. The next question is from Sean Meakim of JP Morgan.

Thank you. Good morning. I was hoping, we could unpack the mix in production enhancement in the second quarter, maybe gives a little more of a read into your guidance for the third quarter. So was the -- so I guess if US energetics were up 18%, can you give us a sense of what percentage growth for -- sorry, what percentage of products would constitute energetics and what the growth rate was for products overall? So just given that, that's approximate two-thirds of the segment services are third and it's the third that drove the decline. Just trying to get a sense of the magnitude?

So we typically don't give the sales by product lines, but energetics is a significant part of the product sales. We also sell some instrumentation. So if you're just looking at total product sales, there's also instrumentation in there from our Reservoir Description group as well.

But energetic are the bulwark of our product sales, and especially more so in production enhancement.

Right. And about two-thirds of the business is in the US and one-third roughly is international offshore. So I'm still trying to figure out [indiscernible] often, give a lot of detail, but he gave some of the detail. And so I'm just trying to understand, if the bulk of the products business was up 18%. How much of a drop off we had to see in the services and diagnostics to get to that, to get that down 4% quarter-over-quarter? Just seems like it's hard to bridge the one data point to the other. So I'm just trying to conceptually understand it better because I've not heard that much volatility in the services previously.

Yes, Sean. That equated to about $4 million during the quarter down in service.

Okay. And [indiscernible] up more off-line, but just trying to understand that the bridge came to the one data point to the other. So maybe just another question on Reservoir Description. I mean, Dave already kind of gave a little bit of around where I'm trying to go in terms of what the exit rate could look like. So it sounds like confidence that you have been knocking on that 20% door and directionally that seems to make sense. Are there any other factors driving the step up in profitability in the second quarter besides mix, is it just job mix coming through?

Yes, it's international and offshore and Core's challenged by North America. So Sean, we've seen these trends take place in recoveries in 2010 through 2014. We think -- we're seeing the beginning of those stages actually currently happening right now.

And Sean, as a reminder, the step up is directly tied to more activity and that's coming through a fixed cost structure. That's the reason you see the nice incremental's and the nice EBIT margin.

Right. So some of these FIDs that were announced back in 2017 and 2018 are finally coming to fruition for us, generating revenue from those.

Right. So the higher margin projects and then you get the fixed cost operating leverage on top, and that's why you see that big step up?

Correct.

Makes sense. Okay, thank you for that detail.

All right, Sean.

Thank you. The next question is from Ian MacPherson of Simmons. Please go ahead.

Good morning, everybody. Hi David, my question is on the operational side had been pretty well covered. Thanks for all that. I wanted to ask Chris or whomever on the free cash flow side, just because operating cash flow has fallen short of dividend coverage in the first half, I think by about 40%. And I know that you have a target to bridge that. But I wanted to see what that looks like in the second half. What your expectations are for dividend coverage from operating cash flow and what leverage you have to pull to get there?

Sure. So I think it's important to remember that, the fundamentals of what have sort of generated free cash flow for Core Lab historically are still all there. It was down slightly this quarter and I highlighted some of the factors that impacted that. But as we go into the second half of the year, we continue to talk about and believe that free cash flow is going to improve and it's driven by this international activity and the growth from our Reservoir Description group and the expansion of those margins. So we do, I'm going to reiterate what I said in my notes that or my speaking notes, that we are confident that as we get deeper into this international recovery, that's going to be reflected in our free cash flow generation. So we're pulling the levers that we would normally pull. I think we'd like to see inventory turns improve a little bit, but like we talked about, we're expanding our product lines there. So there's a little bit of build and inventory with some new product offerings. But then also we did have some bulk purchases there. So as we work through that, you'll see some improvements there as well.

So as I understand it, it's essentially the low capital intensity associated with the expected uplift in already earnings in the second half.

Yes, exactly.

No, no additional [indiscernible] required. And so that's a fixed cost structures -- a real theme here that we will be deploying it Core Lab.

Got it, thanks. And then for the follow up, it will be any lingering or continuing restructuring charges beyond the $3 million that you took in Q2 that we should see again?

We [ph] don't have any plans at this time.

And anything material remaining on that, you mentioned the potential for more non-core divestitures, anything as significant as what you sold last quarter totaling $20 million.

Yes, Ian. We're always going to review, we've got 70 locations in 50 countries, so we'll look through there and one of the diversities last year, we've continually run our laboratory operation in Singapore for the last 50 years. So when we put that lab in 1969, Singapore was the center of Asia-Pacific. But adding laboratories in Australia, Indonesia, Kuala Lumpur made that central location no longer viable it'd become a low margin operation. So we'll continue to look at things like that. We don't have any businesses that we're holding for sale. The promo [indiscernible] was kind of a one off. So as we stand, we'll look for just individual opportunities of maybe laboratories that aren't positioned in the right place.

Okay. Thanks, Dave. Thanks, everyone.

Thank you. The next question is from Scott Gruber of Citigroup. Please go ahead.

Good morning. So just coming back to the domestic frac market, I realize visibility is low, but early indications from the frac companies, so that completion activity is going to be trending down in 3Q. What signs are you seeing in the marketplace that provide confidence that the mark will be more flattish in 3Q versus down?

It's the intensity of the energetic utilization in the completion that we see Scott. So we saw that in Q2, we would expect that to continue into Q3 as well.

So the flattest comment is more on energetic sales versus overall wells fracs?

Yes. And so in some my commentary, I talked about the increasing complexity of the completion, especially associated with the energetics. Right now, we're seeing as many as 20 clusters per stage. You know, this feeds revenue into the production enhancement and there's no reason why that should not continue to increase. So from our standpoint, from our standpoint, total number of wells might be completed. It might be down a bit. But from our revenue opportunity, flattish.

Makes it interesting to hear about it from me and pays interest on the refract technology. It sounds interesting and data highlight that we should be watching the penetration rate here. Can you size the revenue opportunity for core of the mix for over 18 months?

Unknown at this point. This is a brand new product that we've just introduced. We've had some opportunities to use that in some of the older unconventional plays. We are now targeting certainly plays like the Eagle Ford, which is in decline. We will be targeting over the next couple of quarters. The Haynesville, which is a natural gas producer, but we'll go into decline. And also the Bakken, which we project, is nearing production peak here over the next year or year and a half. We think the adoption opportunities is very large for us. Just think about where we were completion wise several years ago. Not uncommon for wells to have three to five stages through the eight stages will lose. A lot of us stimulated rock between those stages. So that's the market that we're that we're looking at. We're working very closely with a couple of operators that it has had some very encouraging results. We're in the process of beating the drum on that with other clients to look over there under stimulated wells. And so we think market penetration can be very nice. It's been improving at a pretty good clip for us, but a little early to put any hard metrics on where we see it going in the near-term.

Yes, I'd appreciate the color. Thank you.

Thank you. The next question is from Connor Lynagh of Morgan Stanley. Please go ahead.

Good morning. Want to go back to Reservoir Description. Here I was wondering, if you could help us think about, is your revenue run rate or your earnings run rate right now, I mean, it seems like there's not a lot of the FID impact. So should we think about sort of the $400 million annual run rate is -- as a good baseline? And then beyond that, can you think about how we should layer in the impact of these FIDs we're seeing this year in terms of longer term revenue growth?

Yes, Connor. During the -- call the darker days of the downturn, Reservoir Description was running at about $100 million per quarter run rate, which largely reflected OpEx spending from clients. So what you've seen in the lift-off from that, getting us now into the $105 million, $106 million and moving in the right direction here is more of that capital spending coming into the revenue stream.

So if you look at 2014, you had revenues running in the $130 million a quarter. We would expect that once you start to pile up these FIDs over four or five years. We could again approach those levels in 2021, 2022.

And that also shows that Connor in our operating income being up sequentially 30% and 23% year-over-year. So you see it expanding or see incremental's and then the expanding EBIT margin.

Yes, makes sense. So, maybe just to follow-up there on the margin side. Is there any reason to think that the margin at which your bidding work for these incremental FIDs different than it had been historically in that 2014 time horizon?

No, Connor.

No. The margins in 2014, which was kind of the peak, reached high 20s, 28. We like our products offerings better. We like our cost structure better. So no reason that, that can't happen.

All right. Thank you.

Thank you. [Operator Instructions] Our next question is from [indiscernible]. Please go ahead.

This is Vaib [ph] in place of Emily's. Sorry to disappoint you.

A worthy pinch hitter there.

Okay. So I guess, just wanted to ask you more about the cost cutting effort that you took. How do you think about future cost savings the potential timing over what you would realize that? And then maybe taking a stab at what do you think U.S. activity could be next year?

Yes, in terms of the cost cutting, we're working to streamline businesses, improve operational structures. We've been on a long term path toward a laboratory and manufacturing automation that's been that's a big driver of our cost savings. And so it's we've got some things that we've started on that more that we'll be implementing in the near term. But it's think of it as a progression of or an evolution of building a more efficient structure. Yes, we're going to target them somewhere between 3% and 4%. We get to that level would be quite pleased.

Okay. So I guess implied it was what you're saying is if, if and if he was growing modestly, you are now properly, your business structure is properly sized for that kind of activity. Is that fair? Take away?

Correct, Well, not yet. Over the next couple of quarters, it will be there. And also with adding some automation, we can get to those levels.

And just one modeling question, if I may. So much on production enhancement is a it's about 40% international. And given that the revenues declined by 4%, my back of the envelope suggested the U.S. a share of the revenues for production, and ASMAN declined about 10%. Am I in the ballpark? Can you help me with that?

Yes. We're good with that.

Thank you. Next question is from Stephen Gengaro of Stifel. Please go ahead.

Thanks. Good morning, everybody. Two things if you don't mind. One, just think about R.D and to the international leverage there. A lot of your peers are talking about kind of high single digits growth this year, maybe 10%-ish in 2020. Do you think that's reasonable for the R.D. business as you go forward here?

Yes, we're at it right now, so we definitely can get there.

Yes, RD International revenues up at 8% force year-over-year. And then we see that building. 80% or so of that of that segment, their revenues are sourced from that market. So think about that when you're trying to model or determine what kind of growth would be in reservoir description.

And you can see it nicely offsets a decrease in North America because we had margin expansion from that international growth.

So International is up. The total business was up round three. So that suggested that 20% piece was down dramatically?

Correct. You can do the math.

Okay, that makes sense. And then as you -- you talked about sort of the intensity on the energetic side. Would you be willing to hazard a guess if you had a sort of a flat environment? What percentage growth -- sort of what that -- sort of intensity measure looks like over the next 6 to 18 months?

I'd put it in the teens.

In the teens?

In the teens.

Wow. Okay, great.

Well, I'm going to go get Steve an example of that. If you've got completions that were up 8% sequentially, our U.S. energetic sales were up 18% sequentially, so there is 10 percent worth there.

Okay, that's helpful. And then when you when you think about your -- the number you gave up 18% energetic sales, what does that number encompass? Is that everything? Is that just -- that's not just GoGun sales, obviously; that's all of your energetic product sales?

That is correct.

Perf operating charges.

Charges and delivery systems?

Yes.

Okay, that's helpful color. Thank you.

Okay, Stephen. Chris, we're going to go ahead and wrap while we don't see any more questions. So in summary, Core's operations continue to position the company for activity levels in the third quarter of 2019. And we know significant challenges await. However, we have never been better operationally or technologically positioned to help our clients maintain and expand their existing production base. We remain uniquely focused and the most technologically advanced reservoir optimization company in the oil field services sector. This positions Core well with challenges ahead. The company remains committed to industry leading levels of free cash generation and returns on invested capital, with capital being returned to our shareholder via dividends and future opportunistic share repurchases as free cash flow levels expand. So in closing, our 96 quarterly earnings release; we'd like to thank all of our shareholders, the analysts that follow Core, and as already noted by Larry Bruno, the executive management and Board of Core Laboratories gives a special thanks to our worldwide employee base that have made these results possible. We are proud to be associated with their continuing achievements. So thanks for spending time with us this morning. And we look forward to our next update. Goodbye for now.

Thank you very much, ladies and gentlemen. That concludes this conference call and you may now disconnect your lines.