Park Aerospace Corp. (PKE) Q2 2017 Earnings Report, Transcript and Summary

Good morning. My name is Kelly, and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Park Electrochemical Corp’s Second Quarter Fiscal Year 2017 Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. At this time, I will turn today’s call over to Mr. Brian Shore, Chairman and Chief Executive Officer. Mr. Shore, you may begin your conference.

Thank you, Operator. This is Brian Shore. Welcome to our second quarter conference call. I have with me as always Matt Farabaugh, our CFO and Senior Vice President. Matt will start with some comments regarding the financials and then I’ll add some comments on my own. Matt’s comments are already posted on our website. There’s a lot of detail on Matt’s comments, so, you also can refer to the website to review the details. Okay. Matt, go ahead.

Okay. Thanks Brian. Certain statements we may make during the course of this call, this discussion which do not relate to historical financial information may be deemed to constitute forward-looking statements. Any forward-looking statements are subject to various factors that could cause actual results to differ materially from our expectations. We have set forth in our most recent annual report on Form 10-K for the fiscal year ended February 28, 2016, various factors that could affect future results, those factors are found in Item 1A and after Item 7 of that Form 10-K. Any forward-looking statements we may make are subject to those factors. I’d like to briefly review some of the items in our fiscal year 2017 second quarter ended August 28, 2016 P&L, which are not specifically addressed in the earnings release. During the fiscal year 2017 second quarter, North American sales were 55% of total sales, European sales were 7% of total sales, and Asian sales were 38% of total sales, compared to 56%, 6%, and 38% respectively for the 2016 fiscal year second quarter; and 53%, 8%, and 39% respectively for the 2017 fiscal year first quarter. Sales of Park’s high performance non-FR-4 electronics materials were 93% of total electronic material sales in the 2017 fiscal year second quarter, 93% in the 2016 fiscal year second quarter, and 94% in the 2017 fiscal year first quarter. Park’s electronics sales were $20.2 million or 70% of total sales in the 2017 fiscal year second quarter compared to $26.2 million or 69% of total sales in the 2016 fiscal year second quarter, and $23.8 million or 76% of total sales in the 2017 fiscal year first quarter. Park’s aerospace sales were $8.8 million or 30% of total sales in the 2017 fiscal year second quarter, compared to $11.8 million or 31% of total sales in the 2016 fiscal year second quarter and $7.7 million or 24% of total sales in the 2017 fiscal year first quarter. Gross profit for the 2017 fiscal year quarter were $7.2 million or 24.9% of sales, compared to $10.4 million or 27.3% of sales for the 2016 fiscal year second quarter, and $8.8 million or 27.9% of sales for the 2017 fiscal year first quarter. Selling, general, and administrative expenses for the 2017 fiscal year second quarter were $5.1 million or 17.6% of sales compared to $5.0 million or 13.2% of sales for the 2016 fiscal year second quarter and $5.3 million or 16.9% of sales for the 2017 fiscal year first quarter. Investment income net of interest expense in the 2017 fiscal year second quarter was $35,000, compared to negative $39,000 in the 2016 fiscal year second quarter and $45,000 in the 2017 fiscal year first quarter. Before special items, earnings before income taxes for the 2017 fiscal year second quarter were $2.2 million or 7.4% of sales, compared to $5.3 million or 14.0% of sales for the 2016 fiscal year second quarter, and $3.5 million or 11.1% of sales for the 2017 fiscal year first quarter. Before special items, net earnings for the 2017 fiscal year second quarter were $2.0 million or 6.9% of sales, compared to $4.6 million or 12.2% of sales for the 2016 fiscal year second quarter, and $3.0 million or 9.5% of sales for the 2017 fiscal year first quarter. Depreciation and amortization expense in the 2017 fiscal year second quarter were $825,000 compared to $840,000 in the 2016 fiscal year second quarter and $827,000 in the 2017 fiscal year first quarter. Capital expenditures for the 2017 fiscal year second quarter were $53,000 compared to $52,000 in the 2016 fiscal year second quarter and $41,000 in the 2017 fiscal year first quarter. The effective tax rate before special items was 7.6% in the 2017 fiscal year second quarter compared to 12.7% in the 2016 fiscal year second quarter and 14.4% in the 2017 fiscal year first quarter. For the 2017 fiscal year second quarter, the top five customers were Daeduck Electronics, GE, Sanmina, TTM, and Wus in alphabetical order. The top five customers totaled approximately 39% of total sales during the 2017 second quarter. Our top 10 customers totaled approximately 51% of total sales and the top 20 customers totaled approximately 66% of total sales for the 2017 fiscal year second quarter. Since the share repurchase authorization announced by the Company on January 2015, the Company has purchased an aggregate of 718,588 shares at an average purchase price of $20.53 per share totaling 14,753,256, leaving 531,412 shares that may be purchased by the Company pursuant to such authorization and an additional 1 million shares that may be purchased by the Company pursuant to the share repurchase authorization announced by the Company on March 10, 2016.

Okay. Thank you, Matt. This is Brian again. So, let me go through some additional comments about the quarter and also about the business. So, the revenue and bottom line shortfall, it’s all electronics, it’s an electronic story, so let’s talk about electronics first, what the problem is, and what we are doing about it. The electronics revenues, as you know, were off even from the first quarter which was weak. So, the market is not great, programs are falling off, and the problem is we’re replacing those items by getting on new programs as quickly as we need to. And there’s really two answers for electronics, one is in Asia; the other one is in North America. So, we have to break it down, because the markets are quite different and the answers are quite different for us. In Asia, we’ve talked about this, I think last call or call before, there was -- let’s call a contest, very well-publicized contest in Asia of all the leading materials in the world. Our entry was Meteorwave 4000, which is the top of our line, and we won; we’re the only one who passed the test the first time, it’s called CAF 1,000 hour; we won. Now some others I think were given a second chance, maybe they were able to pass the test the second or third time. But this is all of top materials in the world. So, we felt -- and that’s very publicized, well publicized, everyone knows about it. So, we felt okay, this is really good, this is what we wanted. We wanted to develop the best products that would give us something different, something unique which I always felt was needed for Park, which we didn’t want to be like everybody else. But the harsh realization for us in Asia is that Asia is very different and the culture is very different, and it's all about making deals, let's make a deal. And we’ve been told number of times and it's obvious, not just by what we have been told but also by the actions that followed that we can have the best product in the world but unless we're willing to make the deals and play the game, it's not going to go so well for us. So, even though this came -- this realization came with a lot of difficulty and a lot of pain, we decided, okay, fine, we have to recognize reality. Denying reality is not going to help us and could hurt us badly. So, now, we're making deals as well. We are trying to be very disciplined about it; we don't want to be wild. But we realize in Asia that it's a necessary part of playing the game, a theory that if we had the best products that that would be enough, is probably not panning out. And like I said, it's difficult for us because we always wanted to carve out something different for us. And now the question is for electronics with the future in Asia, how are we different than others, hard question to answer because we're playing the game now and making deals, we have made some deals with some significant OEMs already; not what we wanted but that's what we're doing. And we feel it's just necessary. We don't feel there is any option for us other than doing that; not we wanted but if you deny reality, you do that at your own peril of course. So, that's the Asia story, really. We could talk about it more but that's the Asia story. Like I said, I just want to say it again, we are trying to be disciplined and not wild about this but we already have made some deals and I guess we're talking to some other people as well. I don't think that there is any issue with our product. I think our product is -- well, it's not just what I say, it's this objective test or contest, if you will, that says our products are pretty darn good. And I am sure that it's not service or responsiveness or anything like that. I think that that's another area where Park does quite well. So, in U.S., it's quite a different story. The U.S. for us is more of a niche market; Asia is the volume market, for electronics. And in the U.S., it's really a matter of sizing our operations to the market opportunity. So, we have a restructuring that has been worked on for probably a couple of months, that's pretty much all planned and ready to go. But we are holding off from pulling the trigger because of recent -- sorry, I have a cold and cough a little bit; sear with me please, recent developments. We have some opportunities that have come our way just in the last I'd say month, partly through the help of one of our really great circuit board customers. And these opportunities are large but we want to see how they play out. One actually is with one of these private space companies, significant and a couple other military aerospace type opportunities now. I always have to be careful; when I say aerospace, I am still talking about electronics segment, I'm not talking about our aerospace activities. This is circuit board materials sold to aerospace or in military markets. So, we are going to hold off and see how these things pan out. If we are premature in pulling the trigger, it could be a mistake. It's very hard to reverse these things. Restructurings, once you do it, you move quickly. That's how it's done; we've done this before. But the problem is that if we can't reverse it, we may not be able to take advantage of these opportunities; that's the issue. So, we need to sit tight for a little while, maybe a few months and see how these things play out. Okay. So, that's the news in electronics, not good. And like I said, the whole story with our top line and bottom line in Parks is electronics. Aerospace, very positive news, all good that I know of; there are a number of items that I want to go over with you. First, a detail but it's an important one. We spoke I think in the last couple of quarters, at least last quarter, about the fact that there was an inventory issue at GE. And just to clarify it, I saw a report that was not quite correct. That's our inventory, too much of our inventory, not somebody else's inventory. And I don't want to go into the reasons or how it happened; that's not really that important but it was recognized. And as we've communicated, calendar year 2016 and 2017 are supposed to be dramatically off with GE Aviation. I think in last fiscal year, it was about $12 million. That's not ramped up to the new levels of course that we expect under the agreement but that's current operating, and this year much less. But the good news is we’ve been told by GE Aviation that the remaining inventory is going to be scrapped by the end of this year and that means next year that overhang will be gone. And we expect about $13 million next calendar year, $17 million which is much more than we originally were expecting, about $13 million. That's for the MRAS portion of GE, Middle River Aircraft. That's the main activity for us. That's the volume activity which relates to the cells and thrust reversers, a lot of material. That does not include the other GE Aviation activities which are still in development. So, actually that's not totally true, some programs we started on, but they're much more difficult to quantify than the MRAS portion of what we do with GE Aviation. So, $13 million plus, plus what, I don't know. The forecast is a pretty nice number but I'm not going to share it with you because I think that’s optimistic, the non-$13 million portion of -- the $13 million I feel pretty confident that's a good number. The rest of it, like I said, I am not going to share with you because I think the number is optimistic, but it will be in the millions I suspect. Okay. That's a detail but an important detail. Another thing, last time we spoke we talked about the fact that we're working on a long-term agreement with GE Aviation. It’s been something that's been in the works for a long, long time. We mentioned that our commitment to build this extra factory is based upon signing up this long-term agreement. I think we described it as a 10-year agreement. That was what was given to us in our last proposal which we responded to. But GE has come back and they said well, they want a life of program agreement. That's a long time. That could be 30 years depending upon what program. So, that's something that they've done before -- my understanding is they've done this before but not too often. So, we are back to drawing board and reengaging on working through the terms and conditions, the contract language because that's a little bit of a change for us. That's obviously very good news and must be some indication that GE likes doing business with us. We didn't ask for it; it wasn't from us; they said they want it. We would have been happy with a 10-year deal. But that's still in the works. As we've talked about before, GE being a large company, things don't move that quickly, but that is an important development. Another one, we've talked, I don't know remember how many times, once, twice, maybe three times about another very large aerospace company where we had given an RFQ to which we responded. We indicated that I think as we indicated that if we were given 100% of business, which is probably unlikely, we committed to building factory, which would cost over $50 million and also financing qualifications about $10 million. Probably unlikely that we’d be given 100% but I think we made that comment before. But the big news is that the screening has been complete and we passed. We met with them very recently. They say they want to go ahead with us. Next step is in a few weeks, a multi-day meeting to go over the detail of technical qualification plan, this is now serious but also review the terms and conditions of the long-term agreement. So, this is no longer preliminary; this is now serious stuff. I just want to give you some perspective about aerospace and where we’re going. We did a little math, and I have a whole spreadsheet here, I'm not going to go through the details. But, here's the assumption. We take the base aerospace revenues without GE from last year, fiscal 2016, take the revenues, subtract GE. That's our base. We assume we never grow that base, which obviously is not a good assumption. We assume we never grow that base. Then we add GE based upon their forecast and we add 25% of the forecast from this other company; 25% is an arbitrary number, could be more, could be less, could be nothing I guess, we don't have that business yet. But I think that it's that serious, let me put it that way. 25% I think it's a conservative assumption. So, you get to the -- let me look at the spreadsheet just to make sure I get the right numbers, right years. Yes, 2020, mid-90 to 100 million for aerospace revenues per year, mid-90s to 100. I think 2020 is aggressive; I don't think that's realistic. Maybe think more 2021. Okay? Again the assumptions, no growth of our base business, just taking the forecast we got, adding it up, simple math; no growth. Also no growth at GE Aviation of new programs, like we mentioned before, we have a joint development agreement we're working on with GE Aviation, going well. We're dealing with GE scientists, very smart people. That agreement -- I mean that program, if successful and we think it's going well, no guarantees, but GE's counting on it being successful, I'll tell you that much, leads to more revenue of consequence quickly. Not in the forecast. That's just an example. And there are other opportunities that seem to come our way with GE fairly often. So, mid-90s to 100 million a year that assumes no growth at all of our base business just doing the math. So, I thought you should know that. Let’s see -- oh, and assuming -- yes, talk about no growth. We are in the process of getting qualified with one of the major aircraft companies of the world on one of their specifications. That's a pretty big deal. That's millions of dollars of revenue per year. And I’m told that there's another one behind it which is even bigger. So, again, the assumption no growth base business; we hope that doesn't end up being a correct assumption, and of course, it's not our intention that it would be a correct assumption. This is new, this thing I just mentioned; we never discussed it before. This is one of the major aircraft companies of the world. That's important for us, big deal, I would say. Other thing I want to mention, which I'm very pleased about -- this is maybe one of those intangibles they talk about. I feel we have a real solid team in aerospace now, based in Kansas. I'm very pleased about that. It's been a real struggle since we started and I think we broke ground in 2007 or something like that, 2008. It's been a struggle, it's been very difficult, every step of the way. And I am not saying we are there by any stretch but we have a very solid team in place now, 'm very pleased about that. I feel that bodes very well for Park's future. We continue to work on the other programs, like Scorpion that we've mentioned before. Those things continue and I won't spend any time going through those in detail at this point. I just want to let you know those things continue and they are going fine. And in closing with my remarks, I want to make a suggestion to the analysts and institutions, which is something I rarely do but when I do it’s not casual. I suggest that the focus for Park for the future should be really more in aerospace. I think that's a reality that needs to be accepted. That's what Park's future is all about. And to really understand Park and where it's going, I think the focus for Park really needs to be on aerospace or should be, doesn't need to be, that's my opinion, should be for our analysts and institutional investors. I know that's a shift because we were -- until 2007 or 2008 we were not in aerospace at all. But I think at this point the right way to look at Park would be to look at aerospace for Park's future. And I think that's it from my introductory remarks. So, operator, can we go to questions now?

[Operator Instructions] Our first question comes from the line of Sean Hannan with Needham & Company. Your line is open.

So, thanks for all the commentary Brain; it’s always very helpful. A question here to start with at least on the aerospace side, you’ve laid out a few thoughts to think about just the future. We’ve obviously heard more of a focus for bigger pieces that should be in play by the time we get to 2020, 2021. In some prior calls, you’ve expressed optimism for some material revenue growth that we should see in 2017 and 2018 for aerospace, just trying to understand how that may still play in the picture at present. If you can give any color around that would be helpful? Thanks.

There’s a couple of ways to answer that question I guess. First of all, GE is a big dog right now, the aerospace, so that drives a lot. So, if you look at 2017 compared to 2016 just assume again nothing else changes which is not really an assumption we would like. Calendar year -- sorry, we aren’t focusing on calendar here, 2017 is going to be -- would be bigger, higher, bigger revenue and higher revenue than 2016, and then in 2018 as well. With GE, we’re ramping up to that high number over -- year-over-year; it doesn’t just spike up in 2020, 2021. The reason I use those years though is that’s when that new program would really start to leg on. It takes three years to do the qualification. So, like I said, we have this detailed technical meeting in a few weeks to review the qualification plan. That’s a pretty serious nuts and bolts kind of discussion; it could take few days to agree upon a qualification plan. Once it’s agreed upon, it’s about three years to get qualified. So, that program doesn’t go anywhere until we get qualified. But meanwhile, GE Aviation where we’re already qualified, the MRAS portion in particular with the thrust reversers and the sales, that’s going up every year. We had to setback this year because of the inventory problem, but that setback is now supposedly going to be reversed based on what we were just told by GE Aviation starting next year, and then we are back to normal, which is not -- no more inventory impact, just normal supplying into the GE Aviation needs, right? And those programs go up every year. Again, the big driver for us with GE Aviation is the A320neo program. The Boeing 747 is a legacy program that kind of provides the base income. The big driver for us is the A320neo. And the nice thing about aerospace as comparing to electronics is there is some visibility. There is a way to predict because Airbus has their forecast, Boeing has their forecast, and they could be wrong, but they are usually not off by a factor of 10 or 20. And once we know how many airplanes we could figure out how many engines and that’s how the forecast is determined. And the forecast we have comes from the GE Aviation. But we have -- we do our own internal checking, cross checking. We have a way to validate it. So that’s one aspect of it. And the other aspect of it is all the other things we are working. And when I made the comments about a scenario where there is no growth of base business, of course I was just using it as an assumption for purposes of illustrating the two opportunities. But it’s surely not our intention, not to grow our base business. That’s something we are less capable of giving you hard numbers, but one of the things I just mentioned is this new program that we are working on with one of the major aircraft companies. And that itself is a couple million or so, 2 million, 3 million a year, and that should -- based upon what we understand, that should impact us toward the end of next calendar year. And then, I mentioned there is another program behind that we believe that another qualification that could be more significant. And then there are the -- literally dozens of other thing we are working on, opportunities we are to working on all the time, everyday really don’t warrant specific itemization or investor call. But let me just say one more thing and I don’t know if this will be helpful or not. I feel at this point that we have some pretty good momentum with the aerospace, like I said, we have a solid team, things are starting to pile up, one thing leads to another. We are not so much the new kid on the block that has nothing going for it anymore. We go in and talk to somebody about one who’d be on their program and say what programs you are on, well we have a nice answer to that now. So in other words, if it’s an OEM, they’re not thinking oh boy, why should I take the risk of being the first company to really try these guys out. Those days are gone, they are behind us, and I think there is some nice -- I sense there is some pretty nice momentum. Things are coming together. One success seems to lead to another. And of course, I always want to make sure I am clear. I am not saying that we are there, that we don’t have a lot of challenges that we don’t need to get lots, lots, lots better. But nevertheless, I do feel that there is momentum. Sean, I am sorry I am not able to give you hard numbers to quantify, but those comments about year-over-year growth, I still feel are correct and may be even more so.

Okay. And I just want to make sure I am interpreting correctly how to layer in the variables of growth. So, if I understand correctly, okay, we start with at least as we think about in the next few years, I don't how many people are modeling out through 2021, but at least the next few years, solid the base business, maybe it grows, maybe it doesn't, hopefully it does. We work through then separately the inventory issue over at GE; we start to get some of that layering in as a growth factor next year; incrementally momentum perhaps in the next -- through the course of the next two to three years with the Airbus 320neo -- A320neo. And then incremental to that should be maybe a couple of singles here and there for some of the early stages of some of these other programs that you're discussing and referencing here in the call.

So, I would agree with that. I wish we could quantify it, but I think that would be risky because we don't know. One thing we can quantify though [indiscernible] do this is the difference between this year and next year for the MRAS portion of GE Aviation. That's the part we're more confident about based on what they've told us. It should be about $7 million better next year. That does not take into account the GE Aviation portion which is the opportunistic portion that is harder to quantify. So, there is a lot of breakdown here. When we talk GE totally, we're talking about thrust reversers and the cells, that's the real core business where we have a lot of visibility; we have the rest of the GE Aviation activities; there are many different things we're working on. Some have already started to ramp up that's smaller and less predictable. So, when I say 7, I'm talking about the known portion of it, approximately 7 million. That's based on what we know, approximately 7. And then the unknown portion should be a positive because this year the unknown portion is very small because again these programs we're just starting on. So, I don't know how to quantify it; it's meaningful but hard to quantify. So, we would probably add to that 7 some other number that we don't know. And just talking about the GE Aviation universe and the other things we're working on, like I said hard to quantify. But I agree with your comments and assessment. Maybe not all singles, I would say couple of doubles, maybe even some triples. That program with that big aerospace company, big aircraft company; as I said, our understanding is a couple few million dollars a year, but we think that leads to bigger things potentially anyway.

And then, just a third question if I may, switching to the electronics side. So, this has really been a tough state and you guys have certainly been wedded to specific markets in communications and infrastructure. It's for the most part been a business that's continued to slide and really only moved in one direction that's down. I think if my math is correct that 25% year-over-year, it's down over 50% from the last five years. You have some optimism around some new opportunities; I don't get the sense that that necessarily brings your business really moving in a true growth trajectory in the big picture. So, I guess my big question here is strategically what are you thinking about in terms of how you are working with this market? Is there some discussion at your level or at the Board level in pushing perhaps to try and become more exposed to other types of growth submarkets within the PCB landscape, such as automotive or is this a business that you can create some value in order to fund the aerospace side and maybe you sell it? Can you share any thoughts around this, because it just doesn't seem to be moving in the direction I think you or a lot of other folks would like to see?

I agree with that. It's a disappointment; it's been a struggle; we've hung in there and hung in there. I don't think we're really looking into getting into other markets because the other markets are lower margin, more commoditized. And that becomes very difficult for Park. It's just not what we are set up to do. The comments that I made are what we are doing in Asia, it's getting more in the game, which comes with some difficulty to Park. It's not how we've done business. And I'm concerned about what that means for our future because okay, we can get in the game, make deals, we have already made some deals, but how does that distinguish us from the other guys who are out there and very aggressive; that would be maybe a longer term question. In the U.S., I think it's a little more straightforward. We need to size the operations based upon the market opportunity. Like I said, we have something finished, ready to go, pull the trigger. But then, I guess it's good news to say we got some opportunities that we didn't really expect to see come our way and they look like they are potentially significant. So, we want to sit on any restructuring until those things pan out. In other words, we still may do a restructuring but it may be different based upon what the needs will be based upon these opportunities. But I agree, Sean and I've never been a guy that’s good at kind of just blowing smoke. I agree it's not a real optimistic story; it's been disappointing; we've hung in there. It's not that we need electronics to fund aerospace anymore; it's more the opposite. The aerospace is generating better returns than electronics already. Electronics, obviously the revenues from electronics are what allowed us to get into aerospace with the investment; also, I think we paid $340 million or so of cash dividends since 2005. That's all about electronics. But right now, it's a tougher story. And we're in there slogging it out and we're trying to eke out a future for ourselves in electronics. But, it would be just wrong and disingenuous for me to say, yes, there is a rosy picture. The things that we've talked about in the past, it's not that they're not true because they were true; now that we talked about opportunities and things we are working on with big OEMs in Asia, but they just haven't panned out as much as we thought they would. They haven't been able to offset the decline based upon the programs we’re on, they’re falling off. So, that's the thing -- programs we’re on, they fall off. We need to replace those revenues with new things, and that hasn't happened nearly as quickly as we thought it would as we were actually told it would, and it just didn't materialize for us as much as we wanted it to. So, that puts us in a position we're in now. It's not a position we're happy about. And like I said, we're doing the best we can to eke out a future for ourselves in electronics. But, it's not the aerospace story where there's all upside and very easy to paint a picture of a bright future. So, I don't know what else to say, Sean. I think you pretty much nailed it though.

Alright. Thank you very much for the color, Brian. And best wishes to the team.

You’re welcome.

Thank you. [Operator Instructions] Our next question comes from the line of Leonard Cooper. Your line is open.

I had some chicken soup as I have cough. While waiting for you to answer the last question, I think I’ve answered the question I was going to ask. I was wondering whether in the self-driving automobiles, if there was any opportunity for Park?

Well, I think the answer is yes. That’s really RF area which is not as an often our leading area, not our specialty. So, we’re seeing small opportunities in the RF area. And it’s certainly an area that we continue to work on, not only with our PTFE thermoplastic products but also our thermoset products. And the reason is that -- and when we get to the very high end of thermoset products, what we call digital products, and maybe that’s not the right way to distinguish between digital and RF. The high end of our digital products, they have the ability to work in the RF area. So, I wouldn’t say that’s a big, big opportunity for us, but it’s an area that we’re working on.

Thank you. And I’m showing no further questions at this time. I’d like to turn the call back to Mr. Shore for closing remarks.

Thank you operator very much. Matt and I are here in Melville office today. So, feel free to give us call. Otherwise, have a very nice day. And we look forward to talking to you soon. Thanks again, bye.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Everyone, have a wonderful day.