Welcome to the Fourth Quarter 2015 Crocs, Inc. Earnings Conference Call. My name is Cory, and I will be your operator for today's call. Please note that this conference is being recorded. I will now turn the call over to Brendon Frey. Please go ahead.

Thank you. And thank you, everyone for joining us today for the Crocs Fourth Quarter 2015 Earnings Conference Call. This afternoon, we announced our fourth quarter 2015 financial results. A copy of the press release can be found on our website at crocs.com. We would like to remind everyone that some information provided in this call will be forward-looking and accordingly are subject to Safe Harbor provisions of the federal securities law. These statements include but are not limited to statements regarding future revenue and earnings, prospects and product pipeline. We caution you that these statements are subject to a number of risks and uncertainties described in the risk factors section on the Company's 2014 report on Form 10-K filed on March 2, 2015 with the Securities and Exchange Commission. Accordingly, all actual results could differ materially from those described on this call. Those listening to the call are advised to refer to Crocs' Annual Report on Form 10-K as well as other documents filed with the SEC for additional discussions of these risk factors. Crocs is not obligated to update these forward-looking statements to reflect the impacts of future events. The Company may refer to certain non-GAAP metrics on this call. Explanation of these metrics and reconciliations to the nearest GAAP metric can be found on the earnings release filed earlier today and on our investor website, once again at crocs.com. Joining on the call today are Gregg Ribatt, Chief Executive Officer; Andrew Rees, President; and Carrie Teffner, Executive Vice President and Chief Financial Officer. Following their prepared remarks, we will open the call for your questions. I will now turn the call over to Gregg.

Thank you, Brendon, and good afternoon, everyone. First, before we talk about the fourth quarter, I’m happy to welcome Carrie Teffner to our first earnings call as Executive Vice President and Chief Financial Officer of Crocs. Carrie brings more than 25 years of consumer goods and retail leadership experience to the company having served as the Chief Financial Officer for PetSmart, Weber-Stephen Products, and Timberland. We’re thrilled to have Carrie as part of the team. This afternoon, we announced our fourth quarter 2015 financial results. Revenues were $208.7 million, towards the higher end of our expectations, and adjusted net loss available to common shareholders was $53 million. Reported revenue was up 1% versus last year, while revenue on a non-GAAP basis from our ongoing business, which excludes the impact of store closings and discontinued product lines was up $23 million or 12.2% to last year on a constant currency basis aided by higher clearance sales and an easier China wholesale compare. While this is typically a small quarter for our business, it is the third quarter in a row that we delivered growth in our ongoing business. We continue to make meaningful progress on positioning our business for long-term sustained success. Some of our actions have yielded positive results already. While others are investments, which negatively impacted the quarter, but we believe will set us up for success in 2016 and beyond. I'll touch on a few of the highlights of the quarter and then Andrew will dive deeper on some of the key actions that we're taking, and finally Carrie will walk you through the detailed financials. In the fourth quarter, we saw several early indicators of our progress. On a constant currency basis, revenue grew both in the Americas and Asia. We had growth in our direct-to-consumer or…

Thank you, Gregg. Today, I want to update you on several important topics, including one, our global DTC performance; two, supply chain and customer service improvements; three, early reads in our spring/summer 2016 performance; four, the sale at South Africa; and five, our turnaround plans for China. Firstly, global DTC performance, global direct-to-consumer revenues were up 2.1% as reported and comp sales were up 9.8%. This is our third quarter in a row of delivering positive DTC comp growth. Our e-commerce business was strong across all regions lead by the U.S. and Asia. Overall global e-commerce revenues increased 28% on an as reported basis and increased 37% on a comp basis. Our e-commerce business continues to benefit from better execution including enhanced digital marketing efforts, a better product assortment, and a commitment to better in-stock positions on core product. The fourth quarter DTC revenue also benefited from an increase in promotional cadence. We continued to realign our retail operations, eliminating underperforming stores, while selectively opening new stores. In the quarter, we closed 11 stores and opened 13. 12 of the new stores were in Asia bringing our Q4 global store count to 559 stores. While the stores closed during the year, generated topline revenue of $6 million in fourth quarter last year, they had no meaningful impact on earnings. Consistent with our overall strategic plan, we have now completed the bulk of our store closings. Over the past two years, our global store comp has declined by 60 stores as we closed a 179 underperforming stores and focused, our openings on more profitable outlet format and increased store count in Asia. We will continue to evaluate our store portfolio in a normal course of business to ensure effective capital allocation. Retail comps were up 0.1% in the quarter with both…

Thank you, Andrew. Turning now to the financials. Revenue in the fourth quarter was $208.7 million up 1.1% from a year ago on an as reported basis. Revenue was up 7% on a constant currency basis. Revenue, as reported versus prior year was impacted by four items. First the negative currency impact of the stronger U.S. dollar was $12 million. Second, Asia wholesale growth of 27.5% was positively impacted by China. As you may recall from our 2014 Q4 call, our China wholesale business was down significantly. Excluding China wholesale, Asia wholesale was up mid-single digits. Third, the closing of 68 retail stores this year reduced revenue $6 million in the quarter compared to last year. And finally, discontinued products and segments reduced revenue by $2 million. All of the revenue results which follow are quoted in constant currency change versus prior year. In the America’s revenue was $102.7 million for the quarter up 1.7%. Wholesale revenue was down 4.4% due to lower at once and increased discounting as we reduced excess and end of life product. Retail sales in the America’s declined 3.7% for the quarter reflecting a negative 3.4% comp due to lower traffic, especially in our tourist markets as well as 14 less stores compared to the same period last year. E-commerce in the America’s grew 31.3%. In Asia, revenue was $76.3 million for the quarter up 21.5% driven by the increase in our Asia wholesale reflecting the easier compare noted earlier as we work with our China partners in the back half of 2014 to address excess inventory in the marketplace. Retail sales in Asia increased 2.8% in the quarter, reflecting a 4.8% comp, our second positive comp quarter in this market. We operated 19 fewer full line stores in the quarter compared to last year.…

Thanks, Carrie. As I indicated earlier, despite challenges from a strong U.S. dollar and an overall difficult macroeconomic environment we are making meaningful progress on our transformation efforts. I believe we're reaching an inflection point and we'll see the benefits of our actions increasingly as the year progresses. I continue to be very confident in the direction in which we are headed and our ability to successfully execute against our plans and achieve our goal of sustaining profitable growth. Special thanks to the Crocs team across the globe for all their hard work, their passion and their commitment to unlock the full potential of the Crocs brand and to build one of the leading, global, casual, light, soft footwear companies in the industry. Now, operator, we'll open the call up for questions.

Thank you. We’ll now begin the question-and-answer session. [Operator Instructions] And Steve Marotta is on the line with the question. Steve your line is open.

Good morning, everybody. Thank you for taking my question. Carrie, I just want to underscore what you just mentioned, and that is – that revenue for the full year of 2016 is expected to be up mid-single digits, not – I should say including all the currency fluctuations, and is maintaining of a similar stance that the company took on the last call. It’s correct, right.

That is correct.

Despite the currency moving against in the South Africa divestiture.

Correct.

Yes, yes. And…

Great. And…

Yes. The only thing I’d say to that is yes, there will be a little bit of a shift from H1 to H2. Yes, we're still confident in our full year guidance.

Great. And Gregg you mentioned that spring sell-in has been pretty good and that it is a little early to quantify sell through. Can you at least quantify the sell-ins and talk a little bit about what gives you confidence and traction of the new product in the near-term.

Yes, absolutely, thanks. We feel great about the evolution of our product line. And as you know, spring/summer 2016 was the first line developed by Michelle Poole and her team. And our goal coming into that season with the reenergized or core molded business while adding color and style to both our molded and non-molded categories. And the teams have done a great job. So if we kind of look at spring 2016, the reaction and slash early reads for both customers and consumers have been strong. And we've seen that across our new core molded product, we've seen that within color and print that’s kind of elevated our styling, and you can see it across kind of new styles that we've introduced in the molded category like the Citi-Lane, the Roka, the Off Road, the Karen, and the Sienna. And so to us, it's a great foundation. Remember that was a starting point without a lot of strong foundation, so as we move forward and look at for holiday 2016, the reaction to that product, which we’ll book really over the next few months has been very, very positive. It’s a step further from the core spring/summer 2016, and we've just come off pretty pre-lining spring/summer 2017 with about 20 of our top accounts around the globe. And the feedback there has been excellent as well and it’s really a step forward from where we are. So it’s a process. Steve, we try and make progress each season. We feel we have absolutely done that feedback from our customers in the early reads we see, puts us in that direction, and we are excited about where we are headed beyond that as well.

That’s great. One other question, in the last few business days, there have been some headlines about patent litigation regarding some of Crocs' held patents. Can you talk a little bit about what’s that about and why it would concern you or not. Thank you.

Yes. It’s really a non-issue for us. The recent decision by the U.S. patent and trademark office relates to one of many of our patents. It’s – the decision is non-final and will be appealed. We’re confident. We will receive a favorable ultimate decision in this. And in the meantime, we will continue to aggressively enforce all of our intellectual property rights around the globe.

Thank you.

Thank you.

Our next question comes from Scott Krasik from Buckingham Research. Scott, your line is open.

Hi, everyone. Thanks.

Hey, Scott.

So, Carrie I know that, I guess the reserves actually went down sequentially, but you still have roughly a third of the receivables reserved. I am just wondering sort of how that plays out and maybe where you are most concerned now going forward?

Right. And the reserves that we have taken tied back primarily to the bad debt charge we took in Q3 primarily related to our China distributors, and we feel just like we did at the end of Q3 that we are properly reserved for those accounts. So I mean that’s really the gist of it. Let me turn it over to Andrew to add a little bit more.

Yes. And I think sort of resulting in that situation, Scott. We are in active discussions with the handful of distributors that we’ve taken those results against and we anticipate that it will be resolved in the coming months. And really there’s two options as we look at how to – our impetus is to take back control of the territories that those distributors are operating, and we will do that in one of two ways. We’ll do that through finding a new distributor to take on that markets or taking some of those markets back ourselves, which will allow us to resolve the – those receivables and actually get back in business in those important markets.

And then outside of that, so how do you see the progression on the gross margins going throughout the year, and then obviously we’re now a long way away from 50%, but maybe talk about the long-term opportunities as well?

Sure. So looking starting with 2016, if you look at the overall consensus, we think it’s in pretty good shape. Although, I would say it’s a little bit optimistic in half one. I think the important thing to keep in mind is that in Q1 gross margin will have a negative – will be negatively impacted by about 150 basis points associated with currency. But overall for the year, often that we feel good where consensus is coming through. What we guided to longer-term in the three-year plan is to get gross -- have gross margins in the low 50s and really the actions there. I think we’ve talked about in the past, it is the SKU rationalization and overlap across region. It’s improving our on-time delivery. It’s the work we’re doing around product development and designing to cost as well as product lifecycle management. Those are kind of key impetus drivers that are going to get us to the low 50s.

Okay, good. And then just last Gregg in terms of what are retailers selling, obviously still very early days, but is this an opportunity for reorders as we get into the summer time since you have delivered earlier than last year. How do you think inventories are going to be at retailers as we go forward based on what you can see?

Yes. I guess two parts to that question. So first of all, to the part of the question of delivery, we’re on track to achieve the Company’s best delivery performance in recent history, and the team has done a great job here in putting a ton of work to really put us in a position between reducing SKUs, which Carrie mentioned evolving business processes, implementing SAP and starting to leverage the system to enable us to operate more effectively as well as frankly just being more customer centric. So we feel really good about our first quarter 2016 deliveries and it’s going to be in line with industry norms, and it’s going to set us up to really start driving that level of service going forward. So we feel very good about that. In terms of the retail environment, I’m going to hand off to Andrew in a second, but we’re in a – we’ve got to build that relationship. We feel really good about all the work we’re doing with our retailers around the globe. I think it’s – the retail environment is tough in general as you guys know, but we’re going to continue to make progress each quarter and each season as we move forward.

Yes. I mean I think making deliveries on time is your first stepping stone to driving reorders. We think we have a strong possible key for some significant growth and reorders in the Americas and Europe. And that’s really a Q2 factor and Q1 is largely around delivering a pre-books and then [indiscernible] starts to grow as you get through Q2, although, we feel good about it.

Okay, good luck. Thanks.

Thank you.

Thanks, Scott.

Next question comes from Sam Poser from Sterne Agee. Sam, your line is open.

Well, thank you very much. Can you just give us some idea of how you are thinking about your store openings and closings off of this base right now?

Yes. Thank you, Sam. It’s Andrew. So yes, we finish the year with 559 stores as we said. As we look forward we’re really going to essentially we can continue to close poor performing stores at lease termination, which we’ll put us closing handful of stores in Europe and North America. Future growth or future openings will be exclusively focused on outlets and those we’ll be largely around the world that will be Europe, Asia and the U.S. and then selectable price stores in Asia. We see ourselves kind of roughly holding constant at this approximate level of stores for the next couple of years.

So at 560, give or take is where you see, okay. And then okay, and Gregg, I know you answered the question already on the patent. Can you be a little more specific it was on the original clog if I’m correct or that hinge on the back of the original clog? Is that correct?

Yes. I think we’re not going to get into the details of it. I’ll just say we have – I will just kind of repeat Sam what I said a moment ago, which is its one of a number of our patents that we have. The decision is non-final. We will feel it and we’re confident. We’ll receive the favorable and help in the position. And I think that’s kind of I’ll prefer to say at this point.

How about this what percentage of your sales in 2015 or as you see in 2016 are impacted by what some of your items, how many SKUs or what percentage of the SKUs or sales is related to this particular patent.

Sam, I guess what I’ve said we’re confident. It will not impact the business.

All right. And then I mean I’m – I would love Carrie, if you could walk through may be its because I’m – if you could just walk through line by line or to get to the $52.9 million net loss. May be I have a taxes wrong in the quarter something, but could you give us some idea. Could you just walk us line by line? You did part of it on the press release, but may be at the income tax that I have wrong for the quarter or something.

Yes. I think specifically if you turn in the earnings releases kind of laid it out. So revenue for the quarter was $208.7 million, gross profit and again I’m going to give you absolute gross profit not the adjusted gross profit, okay. Adjust that – so gross profit was $72.7 million. Selling, general and administrative was $129.3. We had restructuring charges of $1.3 million. We had asset impairment charges of $7.8 million, which is guess us to a loss from operations of $65.6 million, then we have foreign currency transaction losses of about $700,000. Interest income of about $200,000, interest expense of about $300,000. And then other income of about $920,000 which gives us to an operating loss before income taxes has figured $65.5 million. Income taxes are $4.7 million getting us to $70.2 million.

Thank you.

Yes.

Thanks very much and good luck.

Thank you.

Thanks, Sam.

Thanks, Sam.

Next question comes from Jim Chartier from Monness, Crespi. Jim, your line is open.

Hi, thanks for taking my questions. First, you guys reiterated the guidance for the year. Do you still feel comfortable achieving mid-single digit operating margin in 2016.

Yes. So again, with respect to the revenue, we’re projecting at mid-single digit. As I said based on the consensus model that’s out there. We feel good overall with how that shaping up. And that is consistent overall with the mid-single digits that we guided to previously.

Great.

On the operating income line, yes.

Okay. And then I think SG&A was – on last quarter, you guys talked about SG&A being down $10 million year-over-year in fourth quarter.

Yes.

Adjusting for the one-time of things down $5 million [indiscernible]

Yes. So in the quarter, we were down year-over-year in terms of salary and wages. Marketing was down a bit as well as rent associated retail closures. That said it was partially offset by the higher variable cost associated with e-com performance as well as higher professional fees.

Okay. And then Gregg, can you just talk about why you are still confident in the 2016 sales outlook despite some increased headwinds. Is that more on the reception to your fall product line or is at a higher expectations for reorders on spring/summer based on your shipping performance.

Yes. Look I think there are number of factors that kind of give a confidence as we look at 2016. Certainly product as a fees and some of that fee are combination of kind of the feedback we’ve seen in the market expectations around bookings and outlines that’s planed in the front half of the year. Part of that frankly as we have often spring/summer 2016 to fall holiday, we feel really good about where that product is. And we look at our product this year versus last year the expected performance have retail. I said the second piece is deliveries. And we’re on track as I mentioned as a highest service level the company has seen in its recent history as contract with industry norms. That’s going to drive material improvements of business. So and that’s something that, we didn’t – well, we knew we’re working on and had a line of sight to improving, now we’re actually delivering that. We’re actually executing on that we see that in the data. And I say the third piece is team. We built terrific team. One of the best in the industry. Number of folks have joined last three, six, nine months. We’ll see increasingly over each quarter additional benefits from them. And that’s building off three quarters of continuing business growth strong DTC performance and all those things adding up give us confidence as we look at 2016.

Great, thank you.

Thank you.

Our next question comes from Taposh Bari, Goldman Sachs. Taposh, your line is open.

Thanks. Good morning. Can you guys clarify the revenue guidance for 2016. Is it in constant currency or reported may be in the same but…

Yes. So Q1 we’re guiding $260 million to $270 million, that’s reflecting the sale of our South African business and the impact of currency in the quarter as well. For the full year its mid-single digits based on our current assumptions relative to currency.

So mid-single digits on a reported basis or excluding currency.

Yes. Upon the as reported basis, but adjusted basis in our current projection for what currency will be, right.

Okay. So last – I thought the guidance for 2016 was on a mid single digit basis, constant currency as of last quarter that is why I was confused.

Yes.

Okay, fine. Can you quantify the impact of South Africa, what the transition does to revenues next year?

Yes. Specifically with respect to South Africa, on – simply to it’s in the single-digits, but as the high-single digits over mid-to-high single digits over the course of the year based on the performance of 2015. And so we’ve adjusted our guidance, the impact of that on the revenue in 2016 by an equivalent amount.

Okay. And then last question for me is, marketing plans how are you thinking on marketing spend as a percentage of sales in 2016 versus 2015 and how are you planning your budget for the spring/summer season in particular.

Great, yes. So in as we look at 2016, we’re focusing the vast majority of our marketing spend on the spring/summer season, which will kick off directly before Easter. And take us all the way through to mid-July. And that’s coordinated around the world, so that’s in the U.S. or/and also the Asian and European markets. And as we think about our spend, its roughly consistent with what it was last year, although we’re getting a little bit of leverage relative to some sales growth.

Taposh, it’s Carrie. I want tocome on the South Africa question, because I was looking at more of the concept of half one, half two. So on a full year basis it was low double-digits last year, okay.

Okay, thank you.

Our next question comes from Jonathan Komp with Robert W. Baird. Jonathan, your line is open.

Yes. Hi, thank you. Just a couple of clarifications first for 2016. In terms of the currency movement since the third quarter in relation to the full year guidance, how much of that changed percentage wise for the year?

Yes. On the revenue is sort of basically go taking it back in terms of where we guided and how much is currency down versus where we guided at investor day. Our revenue is down from an impact of currency about 2% from when we gave guidance at investor day.

Okay, got it. Then the South African business – sorry if I missed, I think you were just talking the revenue impact. How should we think about the profitability or the margin impact either one for next year?

Yes. So, as Carrie said, we think the revenue impact for the year is low-double-digit so obviously we are going to lose that revenue but it as license fee structure so we will take a license fee from that distributor which will go straight to the bottom line.

Okay. And then any perspective on how profitable was last year?

It’s roughly equivalent, to how profitable it was last year. But, obviously, by making this transition we believe this distributor has the capacity to grow the business substantially ahead of where we could.

Got it. Okay, and then maybe just a broader picture on the revenue guide for the 2016, when you count for those two factors seems like the underlying business, they are quite a bit stronger than the prior outlook given, it’s not entirely clear to me, what’s driving that so any additional perspective there?

Yes I think the only thing I would add is we are few months further down the road. We have more clarity around product and more feedback from product. And you know whereas when we last spoke about, you know, 2016, we were working on our delivery plans . We now have alignment not just a line of sight but we are actually executing and we have data and we kind of see how all that, operating and executing. So we feel really good about that as well.

Got it. And then may be the last one from me, Carrie just on the deficiencies in the internal reporting for the controls. Can you get anymore kind of specific inside something to the scope of what you are looking at? And then, maybe the expected time you might think in terms of remedying some of the issues.

What I comment – I want to ground us in relative to the material weaknesses. If was in the financial close process and in the inventory accounting. And so couple of things to think about. 2015 has been a year of significant change. We implemented SAP this year. We’ve had a number of business process and model changes. We’ve also had changes in personnel including leadership within the finance department. And you know all of these contributed to the deficiency in a controlled environment. So, relative to how we will address that it will be as I indicated part of this is training, part of this is additional auditing of the prophecies to make sure we’re grounded in the process of the plot and complying with them appropriately. As well as, we’ll bring in a third-party to take a look at as well and make sure we’re buttoned up as we can be. So relative to timing, is what I would tell you is we’re going be working on to address this as quickly as possible.

And the professional fees, you mentioned for the fourth quarter is that partly related to this or what were those for?

No, no. No more course of business.

Okay, Carrie, thank you.

And next question comes from Mitch Kummetz from B. Riley. Mitch, your line is open.

Yes, thanks. I guess first question. I’m just trying to reconcile some of the comments Carrie that you’re making on 2016. As you talked about the mid-single-digit sales growth, I think, you said that from an earnings standpoint you thought that consensus, looks like it was in pretty good shape. Then I think you also said that you’re talking about still a mid-single-digit operating margin. I guess what I’m looking at consensus trying to back into the operating margin that consensus is like 3.6%, which I don’t know if that’s within the range of kind of how you guys are defining mid-single-digits but kind of help me understand those pieces over there?

Yes, so I think, mid-single-digit is the range, right. And what I want to be careful of is we’re not giving explicit full-year guidance on each line of the P&L. But what I’d say is again mid-single digits on the revenue line and then with respect to the gross margin, again we feel good overall about consensus. However we do think have one little optimistic given the currency impact but from a year, full-year standpoint we feel pretty good. On the SG&A, you know we didn’t really talk about SG&A for the year. We think it’s going to be after adjusting for the Q3 bad debt charge that we took in China, we think SG&A was relatively flat for the year but leveraging meaningfully as a percentage of sales and through those pieces we get to the mid-single-digit range on EBIT margin.

Okay. So when you were saying that consensus looks like it’s a pretty good shape you’re referring to the gross margin not the EPS?

I’m looking at the gross margin and then we think confirming mid-single-digit range on the EBIT margin.

Okay, all right. And then help me understand – actually what’s the implied FX impact on the year? I think you said it was $9 million or its projected to be $9 million on Q1. And I know that obviously you’re saying mid-single-digit growth in reported dollars for sales. So what’s the overall FX for the year?

Yes we expect the overall FX impact on revenue to be about 3%.

Okay. All right. And then, help me understand, the promotional activity in the fourth quarter that was just a function of how challenging the environment was, because I think you guys were expecting gross margins to be kind of flattish if not up, even a little bit and obviously that was in the case because of a lot of that I think the difference was because of the promotional cadence. So what exactly was going there how clean are you and then maybe as a follow-up to that, what does that due to the sales in the quarter does that make for a tough sales comp in Q4, obviously also the easy margin comp but how do we – how do you guys left sales impact for those promotions?

Thanks Mitch. A number of questions, so the first thing, I’d say is look the Q4 is always a promotional period for all brands and all retailers. Yes, but I think as you rightly pointed out we made the decision in the quarter to react to the retail environment which was a tough environment. And we were equivalently promotional to liquidate aged goods and make sure that were clean. As we come into spring/summer 2016 and impact in the margin was really closed by the depth and breadth of those promotions. Pricing was lowest and we thought it was going to be – I’m got to go lot broader in terms of the product line. But the impact of that as we come out of the quarter with inventories flat but in the last year which we think is a very good performance and as you look at the mix of those inventories. We feel pretty clean, that the proportion its EOL is pretty limited and also the age of that EOL is less than it was a start line…

So how much of the sales did you get in the quarter because you were as promotional as you were?

That’s extraordinarily hard to quantify, obviously did has some impact on sales and will create some comps – some issues with the component next year, but then we are at two seasons into our new product line and we feel confident with performance of the business…

Got it. Okay, thank a lot.

Thank you.

And we have a question from Sam Poser. Sam, your line is open.

Hi, just a follow-up, I mean I know you don't go with line by line but can you give us some idea in absolute dollars of what kind of growth you're expecting to see in reported numbers in your – based on what you know on your SG&A ended for the year.

Yes, so again in absolute dollars, what we have communicated on Q3 as we expected SG&A to be about $515 million, I think, we’re relatively going to be close to that? So that’s what we’re expecting.

Thank you.

Thanks Sam.

And we have question from Scott Krasik.

Hi, thanks. Just two follow-ups, one, I know you’re trying to get away to some extent from delivering backlog on a quarterly basis but maybe could help in this situation given that there are so many moving parts, I mean what type of visibility. Do you have at this point? At the end of the – I guess you probably have to file that in the K anyways right?

No, we don’t file the backlog in our K.

No.

Yes, okay. Gotcha.

Look we have tried to share kind of our confidences, obviously a lot of moving parts on backlog, which is why you know it’s difficult to use that as too much of guide. And so when we look at it, we certainly look at a number of factors and what we try to convey is why we’re confident, based on feedback from product expectations around at one expectations around delivery and what have you, so we feel like we’ve conveyed on the call. We continue to feel really confident as we look at 2016. We’re 18 months into what we continue to talk about as an 18 month to 24 month turnaround, we feel, we’ve made significant progress, despite really challenging financial results. And we’re looking forward to 2016 and really driving improved performance throughout the year and so that’s kind of how we would have answer that question.

Well then, okay. And then if I’m remembering correctly your mid-single-digit 2016 revenue guidance before this was on a constant currency basis. And now it’s a reported basis?

No, it was – the prior guidance was mid-single-digit on a current basis – current currency basis.

Okay, so even though the currency weaken – you’re still able to do it so?

Yes.

That’s correct, correct.

So you’re sort of you are raising your constant currency revenue guidance.

That’s one way of interpreting it.

Yes. Okay. All right, thanks guys.

All right, thanks guys.

We have no further questions at this time.

Thank you everyone. Have a great day.