3D Systems Corporation (DDD) Q3 2019 Earnings Report, Transcript and Summary

Good afternoon, and welcome to 3D Systems conference call and audio webcast to discuss the results of the third quarter of 2019. My name is Robert, and I will facilitate the audio portion of today's interactive broadcast. [Operator Instructions]. As a reminder, this conference is being recorded.At this time, I'd like to turn the call over to Melanie Solomon, Investor Relations.

Good afternoon, and welcome to 3D Systems conference call. With me on the call are Vyomesh Joshi, our President and Chief Executive Officer; Todd Booth, Executive Vice President and Chief Financial Officer; and Andrew Johnson, Executive Vice President and Chief Legal Officer.The webcast portion of the call contains a slide presentation that we will refer to during the call. Those following along on the phone who wish to access the slide portion of this presentation may do so on the Investor Relations section of our website. Participants who would like to ask questions at the end of the session related to matters discussed in this conference call should call in using the phone number provided on this slide and in the press release that we issued today.For those who have accessed the streaming portion of the webcast, please be aware that there may be a few seconds delay and you will not be able to post questions via the web.The following discussion and responses to your questions reflect management's views as of today only and will include forward-looking statements as described on this slide. Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in today's press release and our filings with the SEC, including our most recent annual report on Form 10-K and quarterly reports on Form 10-Q.During this call, we will discuss certain non-GAAP financial measures. In our press release and the slides accompanying this webcast, which are both available on our Investor Relations website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures with the comparable GAAP measures. Finally, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of 2018.Now I'm pleased to turn the call over to Vyomesh Joshi, our CEO. VJ?

Thanks, Melanie. Good afternoon, everyone. GAAP revenue in the third quarter was $155.3 million and non-GAAP revenue was $155.1 million. The difference being the entertainment divestiture completed in July. These results reflect a decrease of 5.6%, but had the entertainment business been excluded from our results, the revenue would have decreased by 3.6%. GAAP gross profit margin was 43.3%, and non-GAAP gross profit margin was 44.4%. For the third quarter of 2019, we reported a GAAP loss of $0.15 per share and a non-GAAP loss of $0.04 per share.The well-known industry decline in manufacturing activity and industrial production has impacted our business this year as overall demand from our customers is down. We also continued to experience revenue headwinds this quarter due to the ordering patterns of a large enterprise customer and the pause we have taken on factory metal systems. From a geographic standpoint, these challenges impacted results in the Americas and Asia Pacific, which was slightly offset by strength in the EMEA region, primarily driven by healthcare.I want to highlight a few positive developments from this quarter. As expected, we have returned to growth in materials, and we are working closely with our customers to find the right production workflows. We are excited that since our last earnings call, we have introduced eight new production materials for our Figure 4 platform. These include application-specific resins like EGGSHELL, medical resins like MED-AMB and MED-WHT and production resins like PRO-BLK 10 and HI TEMP 300. Early feedback from customers tell us that they are very innovative, and the customers are very excited about these new materials for end-user production. These materials will open up new production workflows in our target markets of health care, automotive, consumer electronics and other industrial segments, enabling us to transition from prototyping to production.Our Figure 4 dental platform has been very successful with NextDent materials. And with these 8 new production materials, we will scale our industrial Figure 4 platforms significantly in the coming months.Our healthcare revenue grew 6%, and excluding our large enterprise customer, it grew 15%. We are committed to operational excellence and are keenly focused on cost structure and cash flow.In the third quarter, we decreased net inventory by $11.2 million quarter-over-quarter and generated $6.5 million of cash from operations. We believe, in this uncertain environment, that our most important area of focus is profitability. And to achieve this, we continue to take costs out of the business. Compared to last year at this time, we reduced SG&A by 5% and R&D by 8%. We have been taking cost out of the business throughout 2019. And in the first nine months, we have lowered SG&A by 6% and R&D by 11%, for total operating expense reduction of 8% in 2019.In the coming months, we will be accelerating our strategic reductions so that as we enter 2020, we will have the right cost structure for the company.Last quarter, we disclosed a suspension of federal contracting from the United States Air Force, and I'm pleased that this has now been resolved. On September 6, the Air Force lifted the suspension following our execution of a two year administrative agreement with them, and we are now eligible to obtain and perform new U.S. government contracts without restrictions.Finally, I would like to introduce our new CFO, Todd Booth, who joined us in September. I'm very excited to have Todd here, as we are partnering to focus on operational excellence and driving toward a common goal of profitability and cash generation for 3D Systems. Todd will now provide more details on our results for the third quarter of 2019. Todd?

Thanks, VJ. Good afternoon, everyone. For the third quarter, we reported GAAP revenue of $155.3 million, a decrease of 5.6% compared to the third quarter of 2018. GAAP gross profit margin was 43.3% compared to 47.3% in the third quarter of 2018. GAAP operating expenses decreased 10.8% to $79.2 million. We reported a GAAP loss of $0.15 per share in the third quarter of 2019 compared to a loss of $0.10 per share in 2018.We reported non-GAAP loss of $0.04 per share in the third quarter of 2019 compared to earnings of $0.02 per share in the third quarter of 2018. Printer revenue decreased 17.2% to $30.4 million, driven by the ordering patterns of a large enterprise customer and the softer macro industrial environment.Materials revenue increased 2.8% to $41.4 million in the third quarter. We are pleased to have turned that corner to growth and expect to continue going forward.Healthcare services and simulation revenue increased 6.3% to $56.4 million. As VJ mentioned, excluding the large enterprise customer orders from each year, healthcare revenue increased 15%. We continue to be pleased with the overall demand trends for our Virtual Surgical Planning, medical simulators and advanced manufacturing.On-demand manufacturing revenue decreased 12% to $23.1 million in the quarter attributable to the decline in the manufacturing activity in our industry and the headwind associated with the now resolved government suspension. We expect this headwind to persist in the fourth quarter due to its impact on the pipeline.Software revenue increased 0.1% to $24.6 million in the third quarter. We are still seeing some headwinds from the automotive slowdown in our Cimatron product revenue that we expect to continue in the fourth quarter, so we are taking actions to enhance our software portfolio and expect long-term growth.Looking at the fourth quarter, given the ongoing macroeconomic challenges and persistent headwinds that we have been facing, we are expecting mid-single-digit sequential revenue growth. We reported GAAP gross profit margin of 43.3% in the third quarter of 2019, a 400 basis point decrease from the previous year.Non-GAAP gross profit margin in the third quarter of 2019 was 44.4%, a 300 basis point decrease from the prior year. The decrease was driven primarily by factory utilization, mix and inventory adjustments. As we continue our cost reductions during Q4 and drive supply chain efficiencies, we expect gross profit margins to remain in the mid-40s range in the near term.GAAP operating expenses for the quarter were $79.2 million, a decrease of 10.8% compared to the third quarter of 2018, including the 11.2% decrease in SG&A expenses and 9.7% decrease in R&D expenses. Non-GAAP operating expenses in the third quarter were $69.3 million, a 6% decrease in the third quarter of the prior year and a 3.4% decrease sequentially. Compared to the 2018 quarter, non-GAAP SG&A expenses decreased 4.9% to $48.3 million.Non-GAAP R&D expenses decreased 8.3% to $20.9 million. We are focused on reducing our cost structure by continuing to drive efficiencies and lowering headcount to reduce cost of sales and operating expenses, while prioritizing investments to drive profitable growth.We ended the quarter with $127.6 million of unrestricted cash on hand. We generated $6.5 million of cash from operations and paid down debt by $21 million during the third quarter. We improved working capital performance sequentially, reducing inventory by $11.2 million to $122.7 million. While cash use and generation will continue to fluctuate period to period, we are very pleased with the cash results for the third quarter.With that, I'll turn the call back to VJ. VJ?

Thanks, Todd. Over the last three years, since I joined 3D Systems, we have stabilized the company. We have introduced innovative platforms for plastics with SLA, Figure 4 and our new production materials. And we are gaining share in our 350 metals platform. We are confident that we will ramp up our metal factory system solutions by the end of the first quarter of 2020, and metals will become a good opportunity for the company.For the remainder of this year, we remain focused on profitability and cash generation. We are structuring the company to be lean and profitable. We enhanced our focus on cost structure in 2019 and have reduced non-GAAP operating expenses by 8% in the first nine months. And we will continue taking cost out in the fourth quarter to rightsize the company in this uncertain environment.Looking ahead, we believe our focus on innovative production workflows, including hardware platforms, materials, software and professional services will drive profitable revenue growth in 2020.And with that, we will now open the floor for questions. Operator?

[Operator Instructions]. Our first question comes from Hendi Susanto with Gabelli & Company.

Good evening VJ and Todd. And welcome, Todd. VJ and Todd, I would like to ask more questions about the upcoming strategic initiatives to rightsize your cost structure for 2020. Can you share what major areas you are planning to address and how long it may take?

So I think we started cost reduction and throughout 2019, we are reducing the cost. So we reduced 8%, as I talked about, both in R&D and SG&A. And we need to really focus on getting the companies -- a smaller company, which is profitable. We believe that there is a lot of opportunity in SG&A side because as we understand better, the revenue profile that we want to generate. And I talked about the 2 business model, where you have printer, hardware, materials and the on-demand parts, and the second business model on healthcare and software. What we would like to do is we want to work towards how we want to organize so that we can focus on those two business models and simplify the company. And that will enable us to continue to drive our SG&A cost reduction.As far as R&D is concerned, we had upfront R&D dollars to really develop platforms. And now as the platforms have been developed both for plastics and metals, we are going to focus on very specific product category, which can really drive overall solution strategy that I've been talking about. We are going to look for more production workflows. And if you think about, we have a line of production workflow, dental production workflow, jewelry production workflow, medical devices production workflow. What we want to do is to find hardware, materials, software and professional services combination so we can find new production workflow. And that's where we’re going to focus R&D dollars and try to reduce both R&D and SG&A.

Got it, VJ. And second question is, it is great to see the [recent] [ph] growth in your material business, how sustainable is that?

Yes. So I think, fundamentally, we believe that, as I've always talked about, that in second half, we should be able to see all the hard work we have done in growing our installed base and delivering materials growth. So I do believe that we will have this material growth next quarter and in 2020.Now there could be some seasonality and flexibility. But I do believe, fundamentally, that we are on a path now for materials growth onwards. The important part of the materials growth is the -- as I said, to really have those right production workflows. Our enterprise customer is doing really well. So that materials growth is going to contribute into the overall positive growth. We also feel that dental market, where we introduced our NextDent, is doing very well. We are gaining share and then that dental material growth is also -- we are seeing. We also feel that the approach that we have taken to go after production workflows will enable us to drive more and more materials growth.The new production materials that we just introduced, it's going to take some time because remember, with this, now we will have the growth of the hardware in 2020 of our industrial Figure 4. And then in 2021, we will see the results of also this new production materials. So no, I think we can sustain the positive materials growth that we are talking about.

Our next question comes from Chris Van Horn with FBR.

Welcome, Todd.

Thank you.

You cited some soft macro industrial environment. I was wondering if you could get into -- was there any positive or silver linings within that statement?

Sure. So I think the automotive market, and I think we all know right now, the overall industrial market, the manufacturing category, has a lot of pressure especially in Europe and in China. And the positive side for us is, of course, Americas for those categories and then healthcare I really want to talk about our healthcare business.If you look at healthcare in third quarter, if you just take out the big enterprise customer, we grew 15%. Every single category in healthcare, Virtual Surgical Planning, simulators, our advanced manufacturing of medical devices we do for the medical device company, all those three businesses grew in the third quarter.So the thing that I can tell you from the growth point of view, I absolutely believe, healthcare is in forefront. And I continue to see the progress that we are making in that particular segment, and we are going to have that in the coming quarters and in 2020.The other thing that I want to let you all know that, as I said, that we have stabilized the company. Once we get our factory metal systems completely qualified and start shipping in end of the Q1, our customers are just waiting for our solutions. I do believe that also will help us for growth in 2020. So materials, healthcare and then software. Right now, we are seeing fundamentally some issues, especially on the Cimatron. But I do believe that in 2020 with our new platforms and the solution focus that we have on software and the sales focus we are having on software and healthcare will also enable us growth in 2020.

Okay. Got it. And maybe on that front, are you seeing the competitive landscape change at all, maybe specifically in healthcare and in other markets are competitors leaving due to the softness?

So I think the thing about this category, you have lots of competitors. So you really talk about specific segment and a competitor. So as for example, in my mind, for the SLA category, in the low end, I think there is a real demand issue than people are seeing on the low end. Our SLA platform are very, very competitive. As a matter of fact, we are the best in the world. And we are seeing growth. But I'm just telling you, in that category, I do believe that we have a much better value proposition.The MultiJet printing category. Our success in jewelry market is there. But overall, that segment is under pressure, and we can see that pressure. The SLS market is growing, and we have a very good product. And what we need to do is continue to drive more share gains in SLS. And I think U.S. is a very good competitor. Of course, HP plays into that particular segment.In the metals segment, I think our 350 is a very, very innovative product, especially in healthcare. I absolutely believe our focus on healthcare with medical device is really paying off. And I do believe that, that category continues to grow in 2020. There, I don't -- in healthcare, we don't see that much competition for the medical devices. With respect to the software side, clearly, we have to compete with Materialise, but I do believe that we have a much better value proposition.My view is, right now, the macroeconomic issue in the industrial and auto market will be the one. But I think what we are doing is we're really trying to focus on profitability right now and making sure that when the market comes back, we will be able to grow faster than the market.

Our next question is from Greg Palm with Craig-Hallum Capital Group.

VJ, and welcome aboard, Todd. So I guess starting off with the kind of the Q4 guidance. Normally, you see a bigger jump sequentially, I think mostly that's due to budget flush-type scenarios. I'm just kind of curious what gives you the visibility now, given a lot of those sales tend to come in sort of the December time frame anyway. Is that just sort of where the pipeline is? How it's developing right now? And so...

No. I think we are just trying to make sure that there is uncertainty in the market. And I think that's what we are trying to reflect. I think our pipeline is healthy, but I just want to make sure that we are prudent and not really look at our revenue profile but I do want to really focus on profitability and cash flow. So what I am doing, with Todd's help, is to really say, "Okay, let's make sure that we take cost out. Cost out of the company because that's what will really enable us." Whether the mid-single digits that we are talking about directionally, it may be plus or minus, and I think that's not what we want to drive. I think we are going to get as -- revenue as much as we can get, but I want to focus the company really on making sure we take the cost out.

Yes. That's helpful. And I mean do you care to quantify sort of what you think is the appropriate cost structure for this company either next year or on a long-term basis? I don't know if you can make any commentary, either on an absolute basis or maybe as a percentage.

Well, I think what we are saying, we have mid-40s in the gross margin. And what we need to do is to really figure out, starting in the first half of 2020, how could we be profitable? And I think -- so that kind of gives us the guidance -- guideline in our mind that -- let's just be conservative in terms of the revenue growth. Look at our mid-40s gross margin and then appropriately size the structure. The second thing that we want to do is to really make sure that we look at our capital expenditure and manage the cash. As you saw in this quarter, which I absolutely take tremendous pride in my team that we took our inventory down, we are not consuming as much cash. We basically consumed $3.9 million cash. In Q3, we generated $6.5 million cash, of operating cash. And I think we need to continue to do that because I do believe that having that focus on making sure that we get the right kind of a cost structure so we'll be profitable with lower revenue, because I just don't want to count on getting the revenue and use that as an angle. I want to really say, at this revenue level that we have, I want to be profitable.

Yes, makes sense. And your goal at this point is profitability starting in Q1 in '20 and then obviously...

I would say...

We expect first half of the year 2020 profit -- non-GAAP profitability.

Yes. Okay. And then I guess just lastly, Todd, it would be helpful to get some sense on maybe what excites you about joining 3D Systems? I mean obviously, it sounds like operating costs are sort of first and foremost. But what are some of your other near and longer-term priorities here?

I'll do stress that. So I'm very happy here partnering with VJ on the profitability and cash generation, but the technology the company has and the direction with where we're going with healthcare and software, metals and just the platforms we have, that really excites me.

Our next question comes from Troy Jensen with Piper Jaffray.

Welcome, Todd. Quick for you, VJ. Can you just dive a little bit more into this metal factory comment you made? And I'm curious to know, too, is this related at all to the metal material handling problem that we had earlier in the year? Are these...

Yes, exactly the same things. So Troy, you see, what we wanted to make sure that a part of management unit that we are planning to ship with over 350, we look at the reliability and make sure that we don't have any issues. And that's why we paused, and we are making incredible progress. We know the root cause. And it's a tough problem because when you are moving that metal powder, the electrostatic forces and lot of things that we need to really pay attention to, so it doesn't clamp up. And I think we are finding a very good solution to that. We are testing it thoroughly. And I would rather wait than ship a product, having a quality issue. That has been a fundamental thing that, as you know, for the last three years, I've been focusing on. Quality, reliabilities of a job. Number one. We want to make sure. And so, yes, it's taking a few months, but I absolutely believe that we are going to have an incredible solution.And if you look at the marketplace, there are not that many companies -- actually, there are no company which can really provide this kind of an automatic powder management unit for the metal printer. So this will be a unique value proposition, but we want to do it right. And we are very excited that we have a solution that we will be able to ship in end of Q1.

So you are confirming you have a solution for the problem, and it's just going through the final testing?

Yes. Yes, yes.

Perfect. Okay. Cool. And then how about -- just mainly for Todd, just if you can help to give us great guidance on revenues and margins, sequential basis, we appreciate that transparency. Sequentially, do you think the OpEx on a dollar basis is going to go up, flat or down sequentially?

So as a percentage of sales, it will go down, but we're going to be relatively flat on a dollar basis to slight up. Slightly up. Sure. You need to look at it more of a long-term as we continue to drive it down.

Yes, I figured this...

But I think, Troy, as you -- the focus is on taking the cost out. So that -- if you think about it, we have done it now for the last three quarters and overall, year-to-date, 8% down in operating expenses. So I would to like to see -- continue that kind of profile because we just want to set up the company for profitability and cash generation.

Yes. Okay, sir. How about just quick for you VJ. Just could you give us an update on production platforms for Figure 4? Have you been shipping many? Is there a big pipeline? Any update would be great.

So I think what we are finding now -- so I think as I said, with our dental and NextDent material, we are doing extremely well on Figure 4. With these new materials, especially with 2 materials I'm very excited about. Out of the 10, the 8 that I talked about, the BLK 10 -- I think BLK 10 for the first time, Troy, I fundamentally believe we have an end-user part production material. The customers -- the beta customer that we have provided this material, they are very excited. They think that this is a game-changing material with which we will be able to really find a lot of new production workflows in healthcare, in consumer electronics industry, where they want to really have production parts that they could be doing it without using any tooling. We will be able to go into the industrial segment. And even the service bureaus are also getting very excited because I think they will be able to use this with a very short turnaround time on production runs for the parts that they will be doing. So I really think that BLK 10 is a really innovative material.The other one is the HI TEMP because a lot of people talk about high temperature. I think we have now, for the first time, HI TEMP material for 300-degree centigrade, which I really think is going to open up a lot of new applications in automotive, under the hood. I really think this is going to be another very, very important material.The biocompatible material will allow us to go into the healthcare applications. And then EGGSHELL, which is a kind of an application, but I do believe for doing elastomeric silicon kind of molding. That's also a very innovative material.And I think I always told you, right, that we were seeing -- whenever you have the right materials, right software and the product, we can really change the trajectory. In dental, we have shown that with NextDent. I do believe, with our new materials and with all the feedback that I'm getting from our beta sites, I think now we have arrived for our industrial both the stand-alone and modular, plus the production one also. So I'm very excited about these materials.

Our next question is from Brian Drab with William Blair.

First, I think it's really interesting that on this call, we're talking a lot about cost reductions, R&D and SG&A. And I've had enough time here. So I was listening to the call and looked at the second quarter transcript, and the word flat was used over and over on that call with reference to how you wanted us to think about OpEx going forward. And at that time, you had two quarters of about $72 million per quarter in OpEx. And now we're at $69 million in the third quarter, and we're talking about it going down from there. So is this a shift in how you're thinking about how you want to manage the company? Is this related specifically to Todd joining? Like what -- are you not adjusting...

No, no. I think -- no, I think this is something I started accelerating there in 2019 quarter one. I think what we were seeing at that time also, John and I, that we'll be flat, meaning flat sequentially. That's what we were saying. And -- but at the same time, I think we want to get aggressive. And you could see it already, right? Then when we take our operating expenses for the year-to-date, we took out 11% in R&D and 6% in SG&A in the first nine months. So this is not like this quarter we are talking about it. This was -- I'm on the path because I would rather have a smaller profitable company when you have so much uncertainty. And I think that's what we are focused on.My view is, whenever you have uncertainty, you want to get the right kind of a cost that you're not relying on revenue growth to get the right sizing. Because once you have that -- the other very important thing that I said, which is very important is we had put all of our R&D to develop platforms. And once the platforms are developed, their profile of R&D spend is going to be more on software, materials and kind of a workflow solution rather than designing very expensive platforms. And that also is paying off because we believe that we have the right platforms. Now the investment must be in the software and material. I've been consistently saying that. So Brian, this is not like last quarter thing. This has been something that we have been focused on, and we really want to make sure we want to do the right thing. Yes?

Okay. Yes. I mean it was -- it wasn't that long ago though, the last call is mid-August, and it's over and over flat, flat, flat going forward. So that was the reason I asked the question. Then now it sounds like it's down, down, down is the message. So that's like a shift for you...

But if you then -- if you look at every quarter, we have gone down year-over-year, you could check it out.

Yes. No. I'm looking at it. Okay. I just want to make sure I understood the philosophy. And then one other question, I guess, if I could ask just on gross margin. So gross margin sounds like mid-40s is what we're expecting going forward. It was quite a bit higher in the past. I wonder if you could just summarize just what is the new model and why this kind of shifting profile from higher 40s...

So I think this -- yes, the first thing that you want to do is -- because based on the actual revenue profile, we want to make sure that we reduce the inventory while the revenue is going down. And when you do that, your factory utilization is going to be a factor. And so I want to make sure that we pay attention and that utilization was one of the key driving forces in having the lower gross margin.The second one is we want to make sure that we look at our inventory and then inventory adjustments. That we do is the second reason that the gross margin -- the third thing is a mix because what we want to do is to really ensure that we are driving the production platforms. And then when you are in the production category, the mix also of the materials that you have been shipping will have a different gross margin mix also. So I think those are the 3 things. And I do believe that now, the way we are looking at our profile, I think, getting to the mid-40s in the gross margin, is the right thing to do.

Our next question comes from Jim Ricchiuti, Needham & Company.

This is Mike Cikos on for Jim Ricchiuti today. First question was about the government contracts and the resolution. Congratulations on that. I just wanted to make sure that I heard correctly. So it sounds like there's going to be a bit of a hangover in the Q4 I guess because the pipeline was impacted by this activity. So first, I wanted to confirm that. And then second, is the expectation that, I guess, that hangover, if you will, will be gone as we move into 2020? Or is there still some pipeline activity that needs to be backfilled to make sure that Q1 is off to the races?

Yes. So I think -- I just want to make sure you understand there are two parts of the government thing. There is one particular government work that we have to do with the export compliance. And then we had our order which we talked about. And then there's the Air Force suspension, which is now lifted and -- but it is lifted just in September. So that to the pipeline that I talked about for the -- especially in the ODM business. We still have work to do for over Q4.I do believe that it should -- the business will come back. But it's generally, the sales cycles are long lead sales cycle. So I think there will be some impact also in Q1. But starting in second quarter on, we should not have as much impact on the suspension that we had, especially in Q3.

Okay. That's helpful. And then just shifting markets. If we look at the automotive market, obviously, weaker there based on all the indications we've seen. But is there any reason to get more excited about that market near term? Or are you seeing any pockets where you might be seeing some green shoots?

Meaning the automotive market you're talking about?

Yes.

Yes. So I think automotive market globally is weak. If you read everything, there are a lot of reasons. People talk about electric cars, to Uber, to all kinds of reasons. And clearly, for our prototyping market, for our on-demand parts market and certain jigs and fixtures in those kind of applications, automotive market is very important. And when you have that kind of a weakness -- plus, we are not doing as many new models that they're used to do. And I think that has impact on, overall, the market. But there are a lot of innovative auto industry companies, which are doing electric cars and electric vehicles. Actually, they are still really asking for a lot of innovative design solution using additive manufacturing. So we see that part still really engaged with us and using this new innovative technology.

There are no other questions at this time. I would like to turn the call back over to Melanie Solomon for closing remarks. Melanie?

Thank you all for joining us today, for your continued support of 3D Systems. A replay of this webcast will be available after the call in the Investor Relations section of our website. Thank you, and good night.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.