Manhattan Associates, Inc. (MANH) Q3 2012 Earnings Report, Transcript and Summary

Good afternoon, my name is Jay, and I will be your conference operator today. At this time, I would like to welcome everyone to Manhattan Associates Third Quarter 2012 Earnings Conference Call. [Operator Instructions] Mr. Dennis Story, Chief Financial Officer of Manhattan Associates, you may begin.

Thank you, Jay, and good afternoon, everyone. Welcome to Manhattan Associates' 2012 Third Quarter Earnings Call. Joining me on the call today are Chief Executive Officer, Pete Sinisgalli; and President and Chief Operating Officer, Eddie Capel. During this call, including the question-and-answer session, we may make forward-looking statements regarding future events or future financial performance of Manhattan Associates. You're cautioned that these forward-looking statements involve risks and uncertainties, are not guarantees of future performance, and that actual results may differ materially from those in our forward-looking statements. I refer you to the reports Manhattan Associates files with the SEC for important factors that could cause actual results to differ materially from those in our projections, particularly our annual report on Form 10-K for fiscal 2011 and the risk factor discussion in that report. We are under no obligation to update these statements. In addition, our comments will cover certain non-GAAP financial measures. These measures are not in accordance with, or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. We believe that this presentation of certain non-GAAP measures facilitates investors' understanding of our historical operating trends with useful insight into our profitability, exclusive of unusual adjustments. Our Form 8-K filed today with the SEC and available from our website, manh.com, contains important disclosure about our use of non-GAAP measures. In addition, our earnings release filed with the Form 8-K reconciles our non-GAAP measures to the most directly comparable GAAP measures. Now, I'll turn the call over to Pete.

Thanks, Dennis, and welcome to our third quarter earnings call. I'll start by reviewing highlights from the quarter, Dennis will cover our financial results and Eddie will follow with additional details about our business. And then we'll move to questions. We posted strong results across essentially all financial metrics in our third quarter. License revenue was $16.2 million, up 19% versus last year. We recognized 2 $1 million-plus license revenue deals in the quarter. Both were in the United States, one with a well-known retailer and the other with a well-known consumer goods company. Both are existing customers had expanded their relationships with Manhattan by agreeing to large-scale rollouts of our platform-based Distribution Management suite. At the request of these 2 customers, we'll not share more about our relationship with them at this time. Overall, our platform strategy continues to play very well in the market. That's illustrated by our strong competitive win rate. In the quarter, and for all of 2012, we won about 2/3 of the deals we competed in and about 80% of the revenue that was up for grabs. For the quarter, about 75% of license revenue was from existing customers, largely influenced by the 2 large deals. And for the year-to-date, about 65% of license revenue is from existing customers and about 35% from new customers. Our Services business continues to post great results with revenue up 13% in Q3. We set a new all-time revenue record this quarter. Total revenue was $95.8 million, about $2 million greater than our previous record set last quarter and up about 12% versus last Q3. We continue to manage overall expenses well. The combination of strong revenue growth and tight expense management led to our best third quarter earnings per share result in the company's history at $0.75 a share, up 12% versus last year. Finally, with our strong Q3 and year-to-date financial results and a solid new sales pipeline for Q4, we're raising our financial outlook for full year 2012. Dennis will cover that in his financial report. So now, let me turn it over to him. Dennis?

Thanks, Pete. I'm going to cover our non-GAAP results for Q3 2012, then I'll review 2012 guidance and some preliminary thoughts on 2013. And then I'll turn the call back to Eddie Capel, our President, Chief Operating Officer, for our business update. For the quarter, we delivered another strong financial performance, posting Q3 total revenue of $95.8 million, increasing 12% over Q3 2011 on license and services growth of 19% and 13%, respectively. Year-to-date revenue has increased 14% to $281 million. For the quarter, Americas grew total revenue, 13%; EMEA, 5%; and APAC, 14% over Q3 last year as we continue to experience good demand in our target markets. Adjusted earnings per share in the quarter increased 12% to $0.75 over Q3 2011, and year-to-date adjusted earnings per share of $2.12 is up 23% over the prior year. Sequentially, from Q2 2012, FX losses and other income negatively impacted earnings per share leverage by about $0.035. Excluding currency impact, year-to-date revenue growth is 15% and adjusted earnings per share growth is 19%. Foreign exchange rate variances have positively impacted adjusted earnings per share by $0.01 in Q3 and $0.07 year-to-date versus prior year. Year-to-date, the positive FX impact is being driven by depreciation in the Indian rupee, which has generated a favorable $0.10 EPS benefit to operating earnings, partially offset by negative euro FX impact. For Q4 2012, we don't expect the rupee impact to be meaningful to operating results as the significant rupee depreciation started back in Q4 2011. License revenue for the quarter totaled $16.2 million, increasing 19% compared to $13.6 million in Q3 2011. While our pipeline remains solid, we continue to be cautious as sales cycles on large deals remain less predictable given the prolonged global macroeconomic challenges. Services revenue, which includes both consulting and maintenance revenue, for the quarter totaled $71.9 million, growing 13% over Q3 2011 and is up 15% year-to-date compared to last year. Consulting revenue increased 14% to $47.1 million on solid demand and maintenance revenue totaled $24.8 million, up 12% over Q3 2011. Our customer retention rates continue to run strong at 90-plus percent, and recall that we recognize maintenance renewal revenue on a cash basis. So the timing of cash collections can cause some inter-period lumpiness from quarter-to-quarter. Consistent with prior years, we expect our Q4 2012 total Services revenue will be down sequentially by about 5% as consulting services experiences its typical Q4 showdown due to the seasonal holiday period. Consolidated Services margins for the quarter were 55.1% compared to last year's 56.5%. With continued demand, we have added about 75 new associates in Q3, the vast majority in our Professional Services practice, and the full cost of these added resource will not manifest until Q4. With the timing of new hire additions and the seasonal impact to Q4 holidays on Services revenue, we expect Q4 2012 Services margin to be in the range of 52.8% to 53.2%. Regarding full-year 2012 Services margin, we are raising our range estimate about 50 basis points to 54.7% to 54.9%. Operating expenses, which includes sales and marketing, R&D, G&A and depreciation, were $31.2 million for Q3 2012, flat sequentially compared to Q2 2012, and 3% year-over-year increase compared to Q3 2011. Turning to operating profit, our Q3 adjusted operating income totaled $23.8 million with an operating margin of 24.9% benefiting from revenue growth, high services utilization, lower marketing expenses and the FX benefit from the weakened rupee. Our year-to-date adjusted operating income totaled $66.8 million with operating margin of 23.8%, up 300 basis points. Excluding the impact of foreign exchange rate variances, Q3 operating margin is 23.7% and year-to-date operating margin, 22.7%, up 190 basis points over 2011. Below the line and other income loss, we posted a net loss in the quarter of $247,000, which includes nearly $570,000 of FX losses compared to a Q2 2012 FX gain of about $600,000. As I've mentioned earlier, this swing negatively impacted earnings per share sequentially by about $0.035 versus Q2 2012. Year-to-date, we have recognized the FX loss of $363,000 in other income. Given challenges with forecasting currency, we do not forecast FX gains or losses as part of our updated guidance. Income taxes. Our effective income tax rate for the quarter was 35.6%. Currently, we expect our Q4 2012 effective tax rate to be 36%. Transitioning to diluted shares. For the quarter, diluted shares totaled 20,130,000 shares. In Q3, we repurchased about 419,000 shares of Manhattan common stock at an average share price of $50.61, totaling $21.2 million. Option exercises in the quarter totaled about 309,000 shares. For the remainder of 2012, we are estimating Q4 shares of about 20.2 million shares and our full-year diluted shares to be about 20.4 million shares. Our estimates do not assume any Q4 common stock repurchases. Also, after Q3's buyback activity, our board has approved raising our share repurchase authority limit to a total of $50 million. That covers the adjusted results. Our Q3 2012 GAAP diluted earnings per share was $0.69, representing a decrease of 1% compared to $0.70 we reported in Q3 2011. As you may recall, our Q3 2011 GAAP results included a $0.12 benefit from the recovery of a previously impaired investment security. On an apples-to-apples basis, net of this onetime event, our underlying GAAP results improved by 19%. A detailed reconciliation of our GAAP to non-GAAP results is included in our earnings release today. Now turning to cash flow and balance sheet metrics. For the quarter, we delivered cash flow from operations of $17.5 million, bringing our year-to-date total to $51.4 million, representing an increase of 25% over 2011 operating cash flow of $41 million. Our CapEx was $1.1 million in the quarter and $4.3 million year-to-date. And on a full year basis, we estimate capital expenditures to be about $6 million. Our balance sheet continues to support long-term strategic flexibility and stability with our cash and investments balance at September 30, 2012, totaling $107 million compared to $101 million at June 30, 2012. Our cash-to-asset ratio is at 39%, and we have no debt. Now that covers my Q3 remarks. Let's move on to our updated 2012 guidance and preliminary outlook for 2013. For 2012 revenue, we are updating our full year revenue guidance from our previous range of $365 million to $375 million to our new range of $370 million to $375 million, which represents 12% to 14% growth over 2011. In our Q2 call, I indicated we expected our full year total revenue percentage split to be about 50-50 first half versus second half. With Q3 actual revenue of $95.8 million, we see no reason to change the top end of our guidance. With stronger-than-expected Q3 license performance, we are currently estimating Q4 license revenue to be about in line with our Q3 result of $16.2 million. As I discussed earlier, due to the holiday season, we are also forecasting Q4 Services revenue to be about 5% lower than in Q3 2012, and hardware and other revenue to be flat to down sequentially. For 2012 adjusted earnings per share, given our better-than-expected Q3 earnings per share performance, we are raising our previous full year guidance. And with just one quarter remaining, we are tightening the range from our previous range of $2.65 to $2.75 to our new range of $2.75 to $2.80. The new range represents 19% to 21% growth over our 2011 adjusted EPS of $2.32. We continue to expect Q4 earnings per share to be lower than Q3 given the combined impact of seasonally lower Q4 services revenue and the full quarter impact of our Professional Services hiring activity in Q3. Full year GAAP EPS guidance is also raised to $2.49 to $2.54, representing 19% to 22% growth over our 2011 GAAP EPS of $2.09. For reference, a guidance table is provided in today's earnings release. Regarding adjusted operating margins, we're increasing our full year operating margin to a range of 23.3% to 23.5%, representing 190 to 210 basis point increase over 2011. So that's a lot to be said about 2012, but in summary, achieving the midpoint of our 2012 guidance, we should close out the year with total revenue growth of about 13%, operating profit growth of nearly 24% and adjusted earnings per share growth of 19% to 20%. The EPS growth rate is lower than the operating profit growth rate due to 2012 FX losses and our higher 2012 effective income tax rate. Shifting focus to 2013, we are in the early stages of our 2013 budgeting cycle, but here are a few early comments for adjusted EPS modeling purposes. Overall, we expect the competitive environment to be about the same and currently, are cautious on the global macro environment. We continue to focus on steady revenue growth at or above market with consistent earnings growth. So for revenue, we plan to grow our total revenue at about 1.5 to 2x and an expected market growth rate of about 5% to 7%, so low double-digit year-over-year growth of about 10% to 12%. Adjusted operating margins, given our strong operating performance in 2012, we are targeting operating margin expansion of about 50 basis points over our 2012 result. This improvement depends in part on the relative stability of forecasted FX rates for 2013 for the rupee in particular. For effective tax rate, our best estimate at this time is 36%. We should have better visibility post November elections, or at least hopefully. Diluted shares, we are currently forecasting about 20.4 million diluted shares per quarter for 2013 at this stage. Thank you for your time. Now I'll turn the call over to Eddie for the business update.

Thanks, Dennis. So here is some of the business highlights for the quarter. We added a number of new customers and we also expanded relationships with many existing customers across all regions during the quarter. A list of those that have agreed to allow us to use their names is included in our press release for your reference. As Pete mentioned in his opening comments, we closed 2 $1 million-plus deals in the quarter and we also saw solid demand in our mid-sized deals. The retail vertical and consumer goods vertical accounted for more than half of our license revenue in the quarter. Our Professional Services teams continue to drive customer satisfaction across the globe. For Q3, we took about 80 client sites live using our software solutions. And for year-to-date, we've enabled more than 220 client facilities. I believe our relative competitive position has never been stronger. And the primary way we strengthened our position, and we'll continue to improve it, is through important investments in our products, our technology and our people. We continue to make significant investments in research and development, and have more than 600 people in our R&D department. One example of this innovation is our recent announcement of Manhattan Mobility Labs. The rapid evolution and proliferation of mobile devices, smartphones, tablets and so on has really changed the way our technology vendors serve their customers and their partners. I think it was Gartner that recently stated that the "bring your own device" programs, so-called BYOD, herald the most radical shift in enterprise client computing since the introduction of the PC. Now this movement has resulted in customers expecting mobile solutions that are available on whatever device is preferred by the user. And to meet these expectations, we've created Manhattan Mobility Labs, a development team with a specific focus on mobile applications and their ability to extend the Manhattan SCOPE platform of supply chain optimization solutions. The creation of Manhattan Mobility Labs is really the result of the collaboration we have with our customers in creating solutions that enable the mobile workforce and increase employee productivity. In addition to the mobile offerings we've had for several years, we have several new, exciting and upcoming initiatives, all built on a common mobile framework and available on popular mobile devices and tablets. These applications are designed to help executives and staff alike break away from their desktops and be more engaged and effective in the field regardless of where their field happens to be. For example, retail associates are provided the information and ability to save sales and deliver 0 disappointment experiences to consumers, whilst warehouse managers are provided tools and information right at their fingertips that help drive operational excellence. The new solutions from Manhattan Mobility Labs will leverage Manhattan's Supply Chain Process Platform and feature mobile web applications developed using standard technology frameworks, just another example of leading-edge innovation built directly into our best-in-class supply chain technology platform. And for those of you that might be interested in learning more about mobile solutions, please visit our website where you can see a short video on the subject. So go to manage.com, click on Solutions and then Mobile Supply Chain. Moving to global headcount, at the end of September, we had about 2,350 employees around the world. That's an increase of about 75 since last quarter, essentially all in billable Professional Services positions. We have 60 people in sales and sales management, the same as last quarter. And we continue to recruit aggressively to look for -- look to add about 100 positions in the near term to fulfill existing customer demand for Professional Services. In early October, we completed 2 European customer conferences. We started on October 2 in the U.K. and progressed to France on October 4. Attendance was good at both conferences and the mood was positive, especially given the state of the local economies. And while we expect the economies across Europe to continue to struggle, particularly in the U.K., we're encouraged by our customers' enthusiasms about our solutions and our partnerships with them. Our final customer conference of the year will be in Holland in early November, and we expect similar enthusiasm at that event as well. Now I'll turn it back over to Pete for his closing comments.

Thanks, Eddie. As I hope you can tell from our earnings release and this call, Manhattan Associates continues to perform well. Moreover, we're confident about our competitive position and the opportunities in front of us. Like most management teams, we continue to be concerned about the overall macroeconomic environment that is largely out of control and we feel good about the things within our control. So to conclude our prepared remarks, I believe the transition of the CEO role from me to Eddie is progressing quite well. As we've worked together closely for many years, the smoothness of the transition comes as no surprise to me. He and the management team are well prepared to capitalize on the future opportunities for Manhattan Associates. Operator, we'll now take questions.

[Operator Instructions] Our first question will come from the line of Terry Tillman with Raymond James. Terrell Frederick Tillman - Raymond James & Associates, Inc., Research Division: Really, the first question just relates to the license performance was strong in relationship to my assumption in the quarter. You closed 2 $1 million deals. I mean, should we assume that these 2 $1 million deals are actually larger than normal million dollar deals? Anything you can say to that? And secondly, in these 2 transactions, what -- were you replacing, the ERP solution for wMS, or were you replacing a third-party, the best-of-breed vendors?

Terry, it's Dennis. I'll take a stab and let the peanut gallery jump in. So the deals were slightly larger than some of our other deals, bus as a ratio of those deals to total license revenue, nothing out of the overall ordinary. In terms of wMS, these were, I'm guessing, legacy third-party replacements versus ERP.

Yes. I think -- Eddie here, Terry. That's basically true. We would consider them legacy replacements. For the most part, they were older packaged solutions that have been owned by these companies for some time, and we were fortunate enough to win the opportunity to replace them. Terrell Frederick Tillman - Raymond James & Associates, Inc., Research Division: Okay, great. And I guess, maybe you guys can talk about just the quality and the extent of the pipeline headed into 4Q versus how it felt going into the 3Q period. And what are you assuming around budget flush maybe versus the last year or 2?

I would say that the pipeline going into Q4, Terry, feels about the same as going into Q3. In terms of the budget flush, I think from our perspective, frankly, based upon where we are in the quarter, probably a little early to tell as to whether we're going to see any of that budget flush at the end of Q4. That will become apparent as things move on. And maybe, even post-November 6 and election, we may see some of the sentiment around that change a little.

Yes. So, Terry, the activity in the pipeline remains good. Large deal activity out there, good quality pipeline, as Eddie said, feels like about the same going into Q4 as Q3. We do certainly remain cautious given the global macro environment out there. Terrell Frederick Tillman - Raymond James & Associates, Inc., Research Division: And on that front, I mean, is there any -- I mean, and I don't how you rate cautious. I mean you guys have been cautiously optimistic for some time. I mean, would you rate at the same tone or, again, I don't know how you rate cautious, but is the caution changing or is it just about where you had been cautious all along?

Same tone tucked within the guidance parameters. Terrell Frederick Tillman - Raymond James & Associates, Inc., Research Division: Okay. Okay. And just the last question, this will be the easiest question. Maybe just an update on some of the newer products, so Total Cost to Serve, as well as Distributed Order Management. I don't know who wants to take that in the peanut gallery, but just maybe an update on not only go loss and successes, but maybe how the new deal activity's shaping up.

Yes, thanks. So continuing to see a healthy amount of interest in both of those solutions, Terry. They're becoming part of the conversation, clearly, as we have strategic conversations with both existing customers and prospects, and Distributed Order Management particularly being driven by that omni-channel retail revolution. So doing very nicely and we're very pleased with the progress there.

Our next question comes from the line of Yun Kim with ThinkEquity.

Dennis, the DSO was up a bit sequentially. Is that simply a time of collection issue or is there something else more going on in there?

I attribute that to record revenue growth. So yes, it'd be a little bit more of a timing issue, but if you look at from the beginning of the year, our receivables are up about 30%. Our year-to-date operating cash flow's up 25%. Our collections have been strong. And frankly, you know I like a little powder on the balance sheet. It gives us flexibility sometimes in competitive deals.

Okay. So should we expect that DSO number to sequentially come down this quarter or should we kind of expect that number to be at a little bit higher level going forward?

My expectation is it could be breakeven at this stage. Depends on what revenue does, but within our guidance parameters, I would think we might pull it down.

Okay. Great. Eddie, since like...

Nothing to be concerned about there, Yun.

That's fine. I got it. I like the license revenue number. So it seems like over the last couple of quarters, there seems to be a lot of momentum around mid-sized deals. Obviously, that's a very positive trend, but that also means that you might actually occupy more self-capacity support, those on mid-sized deals. Is that something that you guys are thinking about, potentially adding more aggressively in terms of self capacity to support these new demand trend coming from the mid-sized deals? And then also, any color that you can give us around how you're thinking about those sales capacity for fiscal year '13?

Yes, what we said on previous -- no, we won't be adding capacity, just tack the mid-sized deals. What we've said is we'll be opportunistic, and if we can add about 1/2 dozen folks to the sales organization between feet-on-the-street and sales management going into 2013, we'll certainly take a look at it. We don't feel like we're capacity constrained at this stage in the global environment. And we feel like we got a world-class sales organization.

Okay, great. And for Eddie, you just talked about in your -- in the opening remarks about spending some time in Europe during the quarter. Is that a focus for growth opportunity for next year? How are you thinking about investing for growth in Europe? Would that be more direct sales driven or indirect, if you can give us some color around what you're thinking in terms of Europe?

Yes. Well, the customer conference is over in -- and our annual events, so we are there pretty consistently. We have been operating in Europe with a direct sales force in the major markets for about a decade or so now. In terms of growth in Europe in 2013, we're hopeful that the global macroeconomic conditions will improve and trickle down into the European marketplace because it has certainly been a little slower there than we would have liked. So I don't think you should think about it necessarily, particularly as a growth market for us, but we are looking for it to bounce back. And we're cautiously optimistic about that in 2013.

So in case that it does bounce back, do you expect to hire more on the consulting services side or do you plan on leveraging maybe third-party system integrators for the European market?

Yes. For the most part, you know we have our own direct professional sales organizations in the major markets in Europe. And should we see the demand increase over there, again, we're hopeful of that, we will look to add staff to those organizations.

Yes. And just to pile on, on that, we really think our Services franchise is a competitive advantage for us. So we'll continue to try and extend that organization as long as there's demand out there. And the demand cycle continues to be very positive.

Okay, great. And then one last question. Was -- so is there -- I know you guys have been looking at opportunities to really broaden your vertical exposure beyond CPG and retail, for instance, high-tech. Is there any specific product introductions or -- some other product introductions or innovations that could potentially target outside of CPG and retail? And I think you talked about mobility being a key component in your product innovation. Maybe that could be spinning into more of other vertical-specific product?

No. So no particular new product introductions, Yun. We operate in 8 core verticals. Retail and CPG certainly represented this particular quarter and relatively consistently, about 50% of our revenues. But we are pretty strong in a number of other verticals, life sciences, 3PL, high-tech, food and beverage and so forth. So no particular plans, but we will continue to operate in those verticals, and I'm sure we will continue to see the same level of success.

Our next question comes from the line of Mark Schappel with The Benchmark Company.

Pete, starting off with you and just building on the -- one of the prior questions with respect to your international business. Your international revenue continues to harbor around the kind of 17%, 18% of total revenue range, and there appears to be plenty of upside potential overseas for the company. I was wondering if you could just, as kind of a departing shot here, if you could just give us a little bit of update with respect to the company's plans to grow overseas in the coming year or 2?

Sure, I'd be happy to, and I'd ask Eddie and Dennis to elaborate if I miss anything important. I think one point of clarification. Within the Americas results, it's about 5 percentage points of their revenue that is outside the U.S. So we have total international revenue growth -- revenue as a percent of total revenue of about 25%. Over the past couple of years, we've seen those, the markets we serve outside of the U.S., show nice growth for the most part with some bumps in the road depending on local economies. Now one of the things that we're excited about, and Eddie's been responsible for this for the past couple of years, as the emerging markets, India, China, Southeast Asia, continue to develop a middle class, continue to develop infrastructure, continue to develop complex distribution models, the opportunity for Manhattan in those markets, developing markets, including BRIC countries, other BRIC countries, should be appealing. Now the timing of that is interesting and up for grabs, but I think Manhattan is a first mover, early adopter in this market, should be pretty well positioned. I think the same can be said for potential opportunities in Eastern Europe and markets where the infrastructure and middle class is continuing to grow. So while the U.S. has been a great market for Manhattan, and should continue to be, we think over the next 3 to 5, probably 10 years, international contributions can be even greater. Now the macroeconomic environment in some of those markets is pretty tricky at the moment, but over time, that should sort itself out and I believe Manhattan should be pretty well positioned to do some pretty cool things in those markets.

Pete, I think you've captured the sentiment and the direction well. Our products are internationalized, so the great news is that our solutions are available in almost all of the international markets, certainly the ones that our customers require them to be available in. So we're well positioned from a product perspective. We have organizations, both sales and service, in all of the major markets around the globe. So as the demand increases, we have the infrastructure and the core teams in place to be able to leverage and grow with that demand. And we're certainly optimistic about those international markets growing over time, Mark.

Yes, Mark, this is Dennis. We're going to be judicious about that as well. If you may recall, about 82% of Tier 2, Tier 1 supply chain money is spent in Western Europe and the U.S.. So we'll grow as those markets grow. As Pete mentioned, we feel like we have first mover advantage, but we'll be prudent about that as well.

Okay, great. And then one final question here. Dennis, if I recall correctly from the last quarter's conference call, I think there were a couple of large deals that fell out of the quarter, and those -- given that only 2 closed, 2 large deals closed this quarter, would it be fair to assume that they still remain in the pipeline?

Absolutely. Absolutely. We always have some large deals that slip from quarter-to-quarter, I think it's just become the way of the world. But yes, you're correct. The challenge is, there are still deals that we believe we have preferred position. It's really the sales cycle and predicting actual closure in this macro.

Thanks, Mark.

Thanks, Mark. Operator, I think that was our last question, so let me just close with a couple of very quick comments. This will be my last earnings call for Manhattan Associates, so I just want to take a moment to thank all of you that have followed us for your time and for your support. It's been a pleasure and a privilege to serve at Manhattan, and thank you very much for all of your interest in our company. Thanks very much, and have a great night.

This concludes today's conference call. You may now disconnect.