Sprott Inc. (SII) Q4 2014 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Sprott Inc.'s 2014 annual results conference call. [Operator Instructions] On behalf of the speakers that follow, listeners are cautioned that today's presentation and the responses to questions may contain forward-looking statements within the meaning of the safe harbor provision of the Canadian provincial securities law. Forward-looking statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are implied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. For additional information about factors that may cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements, please consult the MD&A for this quarter and Sprott's other filings with the Canadian securities regulators. I will now turn the conference over to Mr. Peter Grosskopf. Please go ahead, Mr. Grosskopf.

Good morning, everyone, and thanks for joining us today. On the call with me today are Steve Rostowsky, our CFO; and John Wilson, the CEO of Sprott Asset Management. Our 2014 annual results were released this morning and are available on our website, where you can also find our financial statements and MD&A. First, despite a relatively mundane year on the surface, I'm happy to report that I believe our performance and momentum is improving across the board. I'll start on Slide 3, with a review of our financial highlights for the year. Our AUM ended the year at $7 billion, essentially unchanged from the start of 2014. After delivering solid performance throughout the first eight months of the year, some of our funds lost ground in Q4, as the resource indices experienced a very weak quarter. Our adjusted base EBITDA was $0.15 per share. Importantly, we generated $200 million in net sales for the year, as our Enhanced products franchise continue to grow, and we began to gain traction in other product areas. Our capital book continues to perform well, generating a 13% return on the year. Our invested capital now stands at about $360 million. Turning to Slide 4. In many ways it was a year of transition and setting a new foundation for Sprott, as we refocused our Canadian diversified business and work to expand our Global Resource franchise. Early in the year, John Wilson took over as CEO of Sprott Asset Management and began the process of repositioning that business. John will walk you through his progress on that front in a minute. In January, we announced that Eric Sprott was stepping back from his portfolio management duties to focus on his role as Chairman of our Board of Directors. Eric is our largest shareholder, is one of our largest clients in our funds, and will continue to act in representing the firm to clients and investors. We thank Eric for his exceptional contributions as a Founder of our business. And note, that we will continue to honor many of his core contrary and portfolio management philosophies. On the resource side of the business, we continued to expand our passive product offerings with the launch of our first ETF, the Sprott Gold Miners ETF, the SGDM. We're pleased with the early results of this effort, as the SGDM was one of the 10 most successful ETF launches in the U.S. last year, despite its Q3 launch date and a challenging environment for precious metal investments. The SGDM has grown to about $275 million in AUM. And we expect and we will launch our second ETF, the Sprott Junior Gold Miners ETF, later this month. As I'll talk about in more detail at the end of the call, expanding this product line up and building our passive product business is one of our key priorities for 2015. And with that, I'll turn it over to John, to talk about some of the changes happening at SAM.

Thanks Peter. Over the past few years, we've been working to expand the diversification of our actively managed fund business in order to give investors a broader suite of what we call, differentiated product offerings. Our focus is always to offer our clients unique investment solutions that they can't get anywhere else, and we've made great progress on that front. By the end of 2014, for the first time we finished the year with majority of our actively managed assets in non-resource focus strategies, and that percentage has continued to grow as we moved into 2015. This has largely been due to the growth of the Enhanced Funds that I manage as well as growth in new product areas such as alternative income. During the year, we also continued to strengthen our investment team. Peter mentioned, the transition of Eric Sprott, our Founder, away from day-to-day portfolio management, but we also added three new portfolio managers, one in United States and two in Canada, and we think all three of them bring not only a great long-term track record to the firm, but increase the investment knowledge and the breadth of what we can offer investors. Additionally, we appointed new leadership for our precious metals team, and we are excited about our ability to leverage the considerable technical resources that the Sprott franchise has in this category, and implement new and differentiated investment strategies in the gold asset class that will give people access to the asset class with the level of volatility that they can handle. Another addition in 2014 was the acquisition of three real asset funds that are sub-advised by Capital Innovations. The Capital Innovations products, the real asset funds that we're launching have actually really broadened our real asset platform. They added infrastructure, timber and agriculture and have been seeing great traction in our sales channel in 2014 and 2015. We also expanded our alternative income franchise with the launch of the Sprott Bridging Income Fund, a factoring-based fund, giving people access to yield without traditional interest rate risk. As we work to differentiate ourselves over the coming months, you're going to see a number of new product launches for us, both in existing franchises and the start of new ones that we think can help us drive growth into 2015 and 2016. Now, with that, I'm going to turn the call over to Steve Rostowsky, to walk you through the financial results.

Thanks, John. Good morning, everyone. I'll start on Slide 6 with a look at our assets under management. Our AUM was $7 billion as of December 31, 2014, essentially unchanged from the end of 2013 and down approximately $300 million from the end of Q3 2014. Our AUM for the year reached nearly $7.9 billion in the summer, before declining later in the year, along with precious metals and energy equities. Net sales for the year were just over $200 million with the majority of that attributable to our Enhanced Fund. As John noted, we have recently began to see more broad-based sales across our products. After a strong start to the year, our overall investment performance finished flat, with a market value of all our AUM depreciating by a total of approximately $100 million from December 31, 2013, to December 31, 2014. Turning now to AUM by product type. Although, our AUM remained largely unchanged from the end of 2013 at $7 billion, there were meaningful shifts within the composition of our AUM during the year. These changes are reflective of our overall strategy of growing both our global presence as leading resource investor and our diversified asset management platform in Canada. Our mutual fund AUM grew by approximately $400 million on the year, mainly through net sales. Our Physical Bullion business, which remains the largest contributor to our total AUM, decreased by $350 million during the year, due mostly to redemptions from two of our Physical Bullion Trusts. Our mutual funds recorded $289 million in net sales during 2014, while our alternative investment funds as a group reported $147 million in net redemptions with the majority coming from our alternative income strategies. As of December 31, 2014, AUM of our managed companies was $770 million compared with $521 million as of December 31, 2013. The introduction of the AUM through our Korean joint venture more than offset the significant net asset value decline at Sprott Resource Corp. Our fixed term LPs declined by an aggregate of about $20 million during 2014. Moving on to Slide 8, which gives you a breakdown of our revenue for the year. Management fees was $78.4 million during 2014, reflecting a decrease of $6.3 million from the prior period, as average AUM for the year was about $7.5 billion, about 6.5% lower than the prior year. However, Sprott Asset Management's management fees were virtually the same as the prior year, reflecting the shift to higher margin AUM discussed earlier. Commission revenues were $7.8 million for the year ended December 31, 2014, reflecting an increase of 26% from the prior year. The increase was due to a higher level of private placement activity at GRIL and SPW during 2014, but still depressed by historical standards. Interest income was $20.2 million for the year ended December 31, 2014, up from $9.8 million in 2013, due largely to the performance of the loan book and cash following our acquisition of Sprott Resource Lending in July 2013. During the year ended December 31, 2014, we recorded $4.5 million in losses from capital invested in proprietary investments compared with a loss of $14.4 million in 2013. Looking now at Slide 9, summary financial information. Total expenses for the year, excluding impairment charges on intangibles and goodwill, were $93.6 million, a decrease of $8.4 million or 8% from the year ended December 31, 2013. The core components of compensation, salaries, benefits, commissions and bonuses declined slightly year-over-year, as lower salary costs were partially offset by higher bonuses on improved EBITDA. Trailer fees for 2014 increased by 5.2% compared with the prior year. This is a positive trend as our trailer-paying assets, particularly mutual funds have increased. G&A expenses for the year ended December 31, 2014, were about $33 million or 19% higher than last year. The increase was primarily due to higher sub-advisory fees on higher AUM and performance fees on sub-advised products, higher fund start-up costs and marketing costs. Adjusted base EBITDA for the year was $38.1 million, reflecting an increase of $5.9 million or 18.2% from the year ended December 31, 2013. However, EBITDA per share decreased from $0.16 to $0.15 due to the shares issued in 2013 pursuant to the SRLC acquisition. Net income was $19.4 million or $0.08 per share, reflecting an increase of $100.7 million from a loss of $81.3 million or $0.39 per share for the year ended December 31, 2013. The next slide shows EBITDA reconciliation in more detail. I think the slide is self-explanatory, but we feel it's useful to show the components of the adjustments, included in the adjusted base EBITDA metric. Slide 11 provides a snapshot of our current capital position. We currently have an extremely strong balance sheet with $360 million in investable capital as the composition of our capital book is currently approximately one-third cash in equivalents, one-third loans and one-third other investments, primarily seed investments in our own funds. We have a disciplined capital allocation framework in place, geared towards generating returns throughout the economic cycle. Our priorities for the capital book are: preservation of capital, yield generation and seeding our investments. With that, I'll turn it back to Peter.

Thanks, Steve. So just to reiterate on that last point, the balance sheet is a real source of pride for us, and when Steve talks about seeding investments, that's seeding new funds. Turning to the 2015 priorities. As we continue to build Sprott into a global specialty funds manager, we have set four key priorities for 2015. First, we'll continue to grow our passive products franchise. This has been a very successful area for us. It's grown by about $1 billion a year from 2010 to 2012. It currently represents more than $3 billion of our total AUM. The advantages and relative growth that passive products are experiencing globally are undeniable and the relative advantages of our products and brand are well understood. As I noted at the start of the call, we are working on expanding both our ETF, and likely our physicals franchise. And we believe these are areas where we have an opportunity to develop new innovative products, where we have specialized expertise and a sustainable competitive advantage. Listing these products in the U.S. allows us to capitalize on our brand recognition in that market and gather assets from a much larger investor base, including from third party international distribution networks. Second, we'll continue to grow our Canadian diversified businesses by achieving scale in core categories, while continuing the launch of new products with the potential for growth. Third, as we've highlighted in the past, we have a platform that's capable of supporting a much larger asset base than our current AUM. In order to maximize our capacity, we need to return to attracting large scale accounts. Broadly speaking, institutional accounts are better positioned to invest counter-cyclically and we need to make sure we have the right products in place to attract allocations. We do have best-in-class resource strategies and we expect the launch of gold equities fund targeted to institutional investors in the near future. We're continuing to market our Resource Lending LP and are hopeful we'll have our first close in the near future. Lastly, but not least, with our strong balance sheet and public listing, we have the financial strength to grow through acquisitions, should the right opportunities present themselves. We continue to evaluate both in-market and international opportunities to build our scale. That concludes our remarks for today. We'd now be pleased to answer any questions you might have. With that, I'll turn the call back to the operator.

[Operator Instructions] Your first question comes from the line of Graham Ryding with TD Securities.

Maybe I could just start with the new products that you're talking about. So it sounds like a gold equity fund will be institutionally focused. Can you talk about some of the other product launches you're considering for 2015?

Well, I'll turn over to John for most of that answer. I will say that we just filed a prospectus for the Sprott Junior Gold Miner's ETF in the U.S. with the SEC. John?

Well, as I mentioned, we're looking to both broaden out the categories we have already established, continuing on our theme of differentiated product offerings and strategies. So there will be new offerings in the Enhanced franchise to broaden out our approach in that area. There will be new offerings in our hard asset category. To continue to round out our offering in the hard assets, you will see a new offering in alternative income, which builds on our strength there. And then, we have a couple of new areas that we'd rather just keep to ourselves until we present them to the market, given how different they are. But in total, we have including the gold product that Peter mentioned, and a Global Resource fund that's also targeted towards the institutional market. We have six or seven new products that are coming to market this year.

I think you briefly mentioned, but is there any update there on the Resource Lending LP and just how about that portfolio? How the loans performing that are on your balance sheet right now?

Well, I can say that we're really pleased with how the portfolio did in the last year. We have no foreseeable or credit issues in the portfolio and it generated a great return despite difficult market conditions. We're particularly pleased with origination in the recent past, and the franchise is just being built on a very solid foundation there. So in terms of our book, couldn't be happier. Obviously, as opposed to syndicating our deals where we make very small fees that enhance our returns, we'd like to manage money in a dedicated fashion for third parties. We've been going through almost a forensic audit by a lead investor. And I think things look good for our first close with an outside fund in the near future.

So is it fair to say you're more constructive on potential launch in the near future than you were, I guess, this time last year or a couple of quarters ago?

I don't know if everybody caught this, but we almost had a launch last June. We took some time off and reassessed and are now once again thinking we're going to go forward with that, yes.

And then just with your overall AUM mix, are you happy with how the mix sits on your actively managed side between non-resource and resource or do you see that evolving over the next two or three years? And then bigger picture with your whole AUM, are you happy with the mix between your passive and your actively managed or do you see that evolving?

Well, personally I like the mix a lot, and I think it's nice to see each of the sides almost competitively trying to grow against each other. I think they both have great potential. John?

Yes, so I guess just first in terms of the passive versus active mix, it may not be as obvious looking for the outside, but there are tremendous synergies between those two businesses, both in terms of brand presence and where people are buying the products. So here I've mentioned that we have a very strong franchise with our passives in the U.S. market, that's a huge opportunity not just for our passive, but eventually for our active business. So personally speaking from a SAM perspective, I'm thrilled to have strong franchises on both sides. In terms of the active mix, it's been a fair market for resources the last three years. We are committed to that business over the long-term. We have tremendous internal resources that we think we can leverage for that business over the long-term. We believe in the long-term future of that business. When we look at the landscape out there, we see a number of competitors either incredibly impaired at this point or leaving the business entirely. So from a long perspective, we look at that part of the business and say, we cannot only be better in terms of executing there, but we're going to be doing it increasingly against fewer and fewer competitors. And so we look at the business and say, we're going to grow our business. We're absolutely growing at the moment. We're going to continue to grow largely through the fact that almost two-thirds of our business now on the active side is non-resource oriented and its growing quickly. And we carry this option, if you want to think about it on the recovery and the resource market down the road. So we're going to grow anyway just based on the size of the non-resource business, and when the resources come back that's just extra growth for us.

And the net flows in the quarter, on the mutual fund side, were they predominantly in your Enhanced funds or was there contribution from some other funds?

Predominantly, that's been the case. We put a lot of focus in the Sprott Asset Management business on not only broadening our product offering, but obviously getting traction in the sales channel with those products. That does take time. And I'll highlight the Enhanced products took time. People weren't talking about the growth in that business during the first year, it was really the second and third year when people became comfortable with their execution against the strategy that we really saw attraction. And that is happening in the number of other products. So two that kicked-in in the fourth quarter were real assets on alternative income, and they would certainly have continued as we move into 2015. The other one I'd highlight is our flow-through franchise, which has come back. We put that under new leadership two years ago, with Jason Mayer. He's done a terrific job, not only executing on the strategy, but communicating message to the marketplace, and so we continue to expect our flow-through business to take more and more market share over the next couple of years.

Your next question comes from the line of Jeff Fenwick with Cormark Securities.

Just want to start off talking about the balance sheet, $120 million in cash at the end of the year there, but I noticed you drew $15 million on your credit facility. Can you just explain why you would do that?

We thought we'd take it for a test run.

Secondly, in the G&A line, a pretty big jump in the quarter and there was some commentary about added sub-advised products, but I would imagine probably a fairly significant share on the performance of the revenue in the quarter there. Can you give us an indication of how much that was associated with performance fee and then how much would be sort of a run rate?

That's correct, Jeff. We share the performance fee with Third Eye Capital and they take a share of about 50%, so a big, big chunk of the performance fee, which was quite large in the quarter, is a sub-advisory fee that's shown up in G&A. In addition, with the normal sharing on management fees with Third Eye, we also had Bridging, which is new and they have a share of the fees and the real assets funds, which also continue to grow sub-advised by Capital Innovations. So all of those show up in the G&A line, which is the biggest reason for the increase during the year. As I mentioned there was some more other less significant contributors like fund start-up costs and some additional marketing expenses during the year, but without a doubt, the biggest contributor is the sub-advisory fees performance and regular management fees.

And I guess, on that front, you're bringing in some new funds with Whitney George joining the firm here. Can you just give us some sense of how that's going to come together? Is Sprott paying Royce for those funds to come over? And is there some sort of revenue share set up with Whitney George that would sort of affect the level of management fee income that Sprott would be realizing off those funds?

No, there is no impediments to the transaction. Whitney was a large unitholder, a shareholder in those funds. And on his leaving the Royce Group, it was pre-negotiated that he'd be allowed to transition those management contracts to a new party. So it was really just his decision to bring them to us and to try and grow them from here. Royce didn't have a focus in alternative investments, and we're better suited to help him grow them. And he had been a large shareholder as a Royce Portfolio Manager, and has continued to buy shares personally. He just believes that it's a platform where his skills of growing a business in the states are ideally matched.

And are there going to be some opportunities for him, I guess to be even more of an ambassador than for Sprott and some of the other products you're offering down there too?

Yes, absolutely.

And then just one last question here. One of the funds was shut down I think starting the year at the Sprott Absolute Return Income Fund. Just wondering, from what I've seen it sounds like it was about $20 million of AUM. Was most of that proprietary or can you give me a sense of the split there? And obviously you're going to take a charge on that I guess in the first quarter?

About three-quarters of that AUM was proprietary. So we did take or we will reflect in first quarter of this year, a fairly large charge throughout gains and losses on proprietary investments.

But let me put it into context, okay, and the [ph] papers love dirty laundry, but that fund was $20 million in size. The aggregate losses in the fund were in the range of $3 million. We'll eat those losses with our interest book and capital book and other areas in a-month-and-a-half. I mean, it's not a big deal. Fund was slated for closure any ways. So we just obviously moved quickly, given what happened.

Your next question comes from the line of Paul Holden with CIBC.

Peter, you talked about expanding your institutional business quite a bit in your remarks. So wondering what gives you the confidence that the institutional crowd is willing to go back into the resources space, the conversations that you're currently having?

Well, I've been out there for the last year on the lending fund. We have been out there with other funds in certain areas of specialization and we're actually getting quite close to lending institutions on mandate. So we just speak with confidence, because they're right across from us. No question, it's challenging. It's challenging to start institutional fund raising in a volatile area, but if you take a look at our value added on the ground level at these funds, it's actually very solid and it's a very salable franchise.

And are most of the conversations, would you say, taking place in Asia? Is that still an area of focus or are you're getting more conversation, let's say, in North America?

No, it's not totally in Asia, I mean we're looking globally, but probably most of the interest is from North America.

And then a question on Toscana, maybe you can give us some color on that business. I assume like everyone else in the oil and gas space, short-term, the dip in oil is not so good for the business, but maybe it raises some long-term prospects? Maybe you can give us a sense for that?

Yes, actually quite the opposite. Their strategy is a structured yield products focused on energy. They were losing traction, when the easy money was there in energy. Now, they are able to grow, because they can deploy funds and they can raise funds for that growth. Obviously, you have the one quarter effect where you go from yielding on their products, 20% to yielding, 10% for a quarter. But they are secured structured type deals, so actually looking to kick in the high gear there in the next short while.

And then one final question would be related to the business down in the U.S., the Fixed Term LP business, maybe an update on that in terms of ability to grow that franchise today.

We're not expecting a lot of growth there. We are expecting better performance, because it's obviously suffered through the three poor years, especially on the mining side. So we'd like to rebuild the performance fee book there, but the funds have actually, Rick's funds have been self generating. He's been raising just as many new LPs as he's been retiring. So it's been very steady state, and we're happy with it in that regard. I'll say on the other side of the U.S. business, we have, and this is probably true across our whole company, we've been incurring a lot of expenses looking at these new products. And as we launch a new ETF, we've been expensing our start-up cost the whole time. So we have this capacity, we've been incurring expenses to build these businesses. Now they're coming into their own. Now, we're getting in some margin territory.

So final question is the impairment charge you took in the quarter, not a big one, but still an impairment charge was on carried interest. Which business unit does that relate to?

That relates to the U.S. global business to the RCIC business. So on the carried interest that number can go up or down each quarter, unlike sort of a goodwill charge, which you evaluate periodically. That one we look at every quarter and some times it goes up and some times it goes down.

So that does relate back to accruals Fixed Term LP business?

Absolutely.

Your next question comes from the line of Scott Chan with Canaccord.

Just on the performance fees that you announced, it was a lot higher than the preliminary one that you pre-announced before. What was the reason for the main variance?

No, Scott, I think the difference was gross versus net. So what we announced was after the share to the sub-advisor, whereas on our financial statements we have to show the gross number, but I think the real way to look at it is after the sub-advisor shares, it would really comes to us and ultimately to our shareholders.

So for the performance fee, was it mostly Third Eye again, as the one that generated the performance fees you mentioned?

Yes.

And also on G&A, can you quantify how much of that performance fees was in the G&A? I'm just trying to look at kind of a better run rate? Do you realize your sub-advisory business is growing, and that's going to reflect that as well, but is there a number that you can help us out with?

Well, a good chunk of the G&A -- I don't know the exact number, Scott. I'll have to get back to you with that. It is, as I said, it's about 60%-ish of the gross, but not all of the gross fee was Third Eye Capital. So I'll have to get back to you with that number.

So 30% of gross, so it will be probably be about 2% to 3%, I guess.

I think it's a little bit more than that. I think it's closer to 3% or 3% and change.

Peter, on the institutional side, you talked about a new gold equity fund. I guess, is this a fund that has been incubated or seeded, it didn't has a performance track record or is this like a new fund to get institutional investors to buy into?

Well, we have various gold strategies that have been running and the most comparable would probably be the Sprott Zijin Gold Fund. But no, we don't haven't been running a specialized fund doing what we're proposing to do going forward. We are starting that latest April 1.

And just lastly, just going back to the Sprott Absolute, the strategic Fixed Income fund had a large loss as well. Was that related to the same strategy as the Sprott Absolute?

Yes, they run purposely, so it's the same strategy.

And how committed are you to that fixed income franchise going forward?

We are incredibly committed to the fixed income franchise. Our vision and our goal is to not just sort of grow the business, we want to meaningfully grow the business to $15 billion, $20 billion and beyond. And you're not going to get to those types of levels in our business without meaningfully addressing the fixed income opportunity for our clients. So we see a huge opportunity to offer differentiated strategies within the income and fixed income realm. We've been showing great success with alternative income. We've got lots of plans to continue to invest and grow in that area. So it's at the very top of our priority list.

Scott, we have probably above $700 million or $800 million in alternative income strategies that are either running through funds or on balance sheet. And I would note that those strategies when they're now offered in a publicly encapsulated format are trading at 2x book, it's a great area. It's great growth area.

And how much is the Bridging Income Fund? Is that a closed-end fund or is that an open-ended one that you guys have launched?

No, that's an open-ended OM-based fund. So we've seen consistently accelerating fund flows towards that strategy, since its launch. And that's true, as we look even into March so far. So that's just been a great platform for us.

And we just launched an RSP version. So that should help to attract some additional flows as well.

And the Third Eye Capital still capped?

Yes.

Your next question comes from the line of Aram Fuchs with Fertilemind Capital.

I was wondering with the tangible book so high compared to market cap rate, just wanted to ask the share buyback question again. It seems like you have enough cash to see any reasonable volumes of new funds you wanted there? What are your thoughts on share buybacks?

Well, we're thinking about it. It's very important for us to have a pristine balance sheet and to be allowed to seed new investments especially along with sophisticated clients. And I would note, we are earnings very good rates of return on our balance sheet capital. So it's not as though it's sitting and not generating a return. So it's a tough trade-off, but it's one that we're thinking about.

And then the related matter, the LOC, that $15 million was it really just sort of an experiment, or is this a move to sort of test a little more leverage in the balance sheet?

We didn't need the leverage at all. We've been running our Resource Lending area as a warehouse to our balance sheet funds. There is a no question, if we wanted to, we could lever it substantially, but we don't have an interest in doing that. We just want to make sure that if we have opportunities, and I'm speaking specifically about deploying lots of capital with the partner that we can flex if we need to. So we actually did just want to test the credit facility and make sure we can draw on repay and we incurred a little bit of interest doing that, but it was really insubstantial. We just want to make sure we got a very efficient balance sheet.

And then the trust business, you mentioned you want to expand that. Is that N number of funds, or is there going to be new trust, or you just mean, just getting the assets growing again in the funds that you have?

While there is definitely other commodities that we can I think offer a product in, and so we're just looking at it. But it's a great product area, and we have a very efficient distribution network, and I think those things we can do.

I would just emphasize that, I think what we've established in that business is we're best-in-class, both in terms of the innovation we brought, in terms of structure and the support we put into that business in terms of its performance relative to NAV. And that gives us a lot of leverage, both in terms of Peter's comments about other categories, but also different ways we can grow off our existing days. We just see a lot of opportunity in that business.

There are no further questions at this time. Mr. Grosskopf, I'll turn the call back over to you. End of Q&A

Well, thanks everyone for your interest in today's call. We look forward to talking to you around the next quarter. If there is any question in the interim, we're always happy to answer them. And have a good day.

This concludes today's conference call. Thank you for participating. You may now disconnect.