Ladies and gentlemen, thank you for standing by and welcome to the Trimble First Quarter 2020 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s call is being recorded. [Operator Instructions] I'd now like to hand the conference over to your speaker today Rob Painter, Chief Executive Officer. Please go ahead.

Good afternoon. COVID-19 is on the forefront of everyone's mind. Our presentation format will be different this quarter and is structured to address topics that seem to be top of mind amongst our long-term shareholders. As always our presentation is available on our website and we ask that you please refer to the Safe Harbor at the back. Before we start walking through the slides, we want to acknowledge that this is an extremely challenging and uncertain time for all of us and that everyone listening has their own unique set of circumstances they are dealing with. While these calls are designed for our investors our employees are also active listeners. In fact over 40% of our employees are shareholders. As such these updates speak to both audiences. In our current environment, we lead with a moral principle to support the health and safety of our community including employees, customers, and dealer partners. We also lead with a strategic principle to keep our business moving forward. We have customers and partners who rely on Trimble to keep their businesses running to move the goods of commerce, to feed the global population, to build and maintain our infrastructure, and more. With heartfelt gratitude and by the level of dedication and resolve from our over 11,500 Trimble colleagues, a worldwide network of dealer partners and our customers. As a leadership team, we activated a comprehensive global business continuity plan in early March. The vast majority of Trimble is working remotely and we are in the process of defining when and how we gradually return to our office environments. The ongoing economic impact to Trimble will correlate to when and how we and our customers establish a set of new normal working conditions. While it feels like we can see the light at…

Thanks Rob. Turning to slide five, non-GAAP revenue for the first quarter was $794 million in the middle of our guidance range despite greater-than-anticipated weakness in demand late in the quarter as the pandemic impact widened. I'll note that Q1 revenue reflects outstanding management of the supply chain disruption coming out of China. We exceeded our initial expectations in fulfillment of customer demand despite the fact that the shutdowns in China were more severe and longer-lasting than we anticipated when we issued guidance in mid-February. Total revenue growth for the quarter was minus 1% which included minus 2% from organic growth and approximately minus 1% from changes in exchange rates as the U.S. dollar strengthened during the quarter. Acquisitions added about 2% to revenue during the quarter. Our recurring revenue was strong with annualized recurring revenue or ARR up 7% year-on-year and up 6% on an organic basis. Note that this represents about a 1% acceleration from ARR performance in Q4 of 2019. Gross margins, operating margins, net income and EPS improved versus prior year and EPS came in well above our guidance range. Margins improved during the quarter for a number of reasons. Gross margins were higher year-on-year driven principally by an improvement in mix, as our higher margin software businesses performed relatively well during the quarter. Lower levels of discounting and the introduction of higher end new hardware products also improved margins. As the impending weakness in the economy became apparent, we pulled back on discretionary spending, including travel and outside services and we reduced our rate of hiring. In addition, our expense relating to incentive and commission plans was reduced meaningfully during the quarter. Note that the temporary pay reductions Rob mentioned in his remarks did not take effect until the last week of Q1, so we…

Let's move to slide 10. While we are suspending our second quarter and total year guidance, we also want to be transparent and talk about the areas where we have more and less visibility. David described a number of ways in which our business was impacted in March as the economic slowdown took hold. I'll expand on those comments and give you some thoughts on how we see our business trending in the second quarter. The overall performance of the quarter will correlate to the opening up of global economies and the return of more normalized demand patterns. The areas of the business model where we have the most visibility and confidence includes ARR, gross margins, and operating expenses. ARR represents approximately one-third of our total revenue. In the second quarter, we expect this to be up in the low single-digit range on a year-over-year basis. We'd also expect to see modest gross margin expansion as our revenue is increasingly weighted towards software-centric revenue. Relative to operating expenses, David covered the cost containment actions we took. In our non-recurring revenue businesses, new hardware demand and new logo software bookings growth has been depressed during the shelter-in-place time. We are digitally engaging with prospective customers and building our pipeline, but the fact remains that the rate of deal closure levels are below what we experienced at the beginning of the year. Looking at our reporting segments and taking a view of the puts and takes in the end markets, we have a point of view on the relative performance we expect across the segments. On a year-over-year basis, we expect revenue in all reporting segments to be down in the second quarter. We expect resources and utilities to outperform amongst the segments driven by our correction services and utilities businesses. On…

Thank you. [Operator Instructions] And our first question comes from Ann Duignan from JPMorgan. Your line is now open.

Hi, good afternoon, I guess. It’s afternoon your time as well as ours. So good to hear all of you. My first question is around the resource business and it really performed significantly better than we had anticipated or forecasted. Can you just talk a little bit about what actually happened there? And how sustainable the margins are there? Or whether it was a one-off rollout of some new product? Thank you.

So yes, there was a few factors that contributed to the outperform in the quarter, which includes some of the following. So it wasn't early planting season overall, which we think helped the business to some degree. To the credit of the team the new product introductions that have come out in the last month seem to be doing well in the market and we think that that contributed. The other part that's in Resources and Utilities as a reporting segment is our correction services business, as well as a set of utility and local government businesses we have. Our correction services business had a very strong first quarter which we believe also correlated not only to the health of the business but the early planting season. And then our utilities business has been coming along nicely and the Cityworks acquisition that we completed a few months ago is off to a nice start. So a number of factors came together in the reporting segment to set up a next quarter.

And if Q1 was supported by the early planting, does that mean that the margins have peaked for the year despite everything else that's going on but seasonally we would expect Q1 margins to be the strongest?

Yes that's a good point, Ann and that would be correct.

Okay. And then on Buildings and Infrastructure, how lack -- how little visibility do you really have on the hardware side in that business just given what's going on with construction, equipment, production and then sales? I know you listed it as a risk in one of the further out slides. But if you could just address where do you see the greatest risk to your business in Buildings and Infrastructure? Thank you.

Well, there's certainly less visibility into the hardware business than the recurring revenue, software we have in the reporting segment. If I take it from an angle of sentiment from customers, I would say we're hearing mixed reports from customers so far. On the positive side, we came in -- as we came into the first quarter, our customers had backlog and the sentiment was strong. And then as the virus took hold, projects clearly slowed down or halted and that was a negative at the end of the quarter. So here in the next few, I'll say weeks or months, as our customers get back to work, we expect, I'd say the hardware side of the business to proverbially come back to work as well. And now what I would say is we also hear some concern about work coming into looking forward into 2021. And then we also hear shift in sentiment as you would expect around some of the end market work. So something like commercial work or energy-related work will be difficult work such as hospitals or data centers would be good. So the mix of work is we expect to change as well.

So if I have to rank order your customers in B&I, the construction equipment probably the weakest sentiment maybe your contractors next given the projects just stopped. And then maybe the later cycle the architects, et cetera may be a little bit less impacted at this point is that a fair characterization? And I'll leave it there. Thank you.

That's pretty close. I'd say, I mean in the software businesses, overall the work we do is of essential nature. It's an ERP system you're either in business or you're not in -- the technology continues to be fundamental to the business and used. The -- then there is the next category I would take the construction equipment, let's say the contractors and then the third would be the OEM. So OEM-related revenue that we have I would put at the bottom of the list in the rank order.

Okay. Appreciate the color. I’ll get back in line. Thank you.

Thank you. And our next question comes from Rob Wertheimer from Melius Research. Your line is now open.

Yes. Hi, and thank you for the question. It's interesting you're offering some new utilities to some of your customers to help deal with coronavirus in various ways, whether it'd be on the trucking side or just on the safety side. I'm a little bit curious, I mean, it's a tough saying that it's obviously an opportunity to potentially reach new customers. So is that expanding your reach? Is it mostly to existing folks that you have? Is it offering new features that they wouldn't have otherwise seen to them? And can you just give a little bit of a sense of how much that helps you expand?

Well, the apps themselves are available to any company. So we didn't make a distinction of a customer not a customer. Now you'll probably get more value out of it if you are an existing customer and you're integrating into the bigger workflow. So I suspect there is a degree of let's say visibility or reach to potentially new customers but I should say it wasn't initiated as a marketing effort...

Yes. I didn't mean to imply I'm sorry. And then the second question I guess is just on defensiveness. Again, this is a little bit of a real-time test and how bad things can get. And I'm curious if it gives you a sense of how much trucking activity is down you probably do? And just whether you lose firms or customers or individual licenses? So, just a sense of the defensiveness as to how far the market to fall in trucking might be interesting. Thanks. I'll stop there.

That's a good question, Rob. Certainly, the trucking market and well I say North America is certainly challenged at the moment and we see that the same data that you do whether it's the new Class eight units or now inventory levels or spot market rates. So it is a tough macro setup here in the near -- I'll say near to midterm for trucking companies. And David covered looking back at Q1, there were actually also some quite bright spots. And -- but looking forward, yes, I would say the macro is more negative at this point. Now when we think about the defensibility of the business, we actually also think this becomes a strength for Trimble. And so far, as we've got the value proposition and we've got the balance sheet to continue to be able to invest in this business, we've seen a couple of competitive companies either go out of the market or significantly cut back in the last couple of weeks. So from a competitive position, we'll continue to play offense in this business. We think we've got a winning strategy and we believe in the team that we have that's pursuing the strategy. So, we won't back off of let's say the pursuit of the business strategy. And we're confident that as we come out of this that we'll come out of it stronger. And that's really a major part of the orientation, we have as we really came into this is make sure that we position ourselves to exit the crisis on a stronger competitive footing than how we entered it.

Okay. Thanks, Rob.

Thank you. And our next question comes from Richard Eastman from Baird. Your line is now open.

Yes, good afternoon. Rob, could you -- I think in the guide you spoke to just some thoughts around the second quarter suggesting that really all four business groups would be down year-over-year in revenue. And just trying to sift through your commentary about weakening in March, are there any of the four business groups that might be expected to see revenue growth sequentially in the second quarter?

Okay. So, if we think about the businesses sequentially in the second quarter, the short answer is, it wouldn't change my answer. I mean historically, you would expect to see construction especially civil construction coming on stronger in the second quarter given the summer season for construction. But we don't see that happening this in the second quarter. Otherwise, if you took a market let's say Resources and Utilities which is ag-centric, you would expect to see that seasonally decline in the second quarter if I use that as a sort of a contra example.

Yes. And then Geospatial given the oil and gas exposure that's down sequentially and then transportation I guess you addressed. So -- okay. In your remarks Rob, you had mentioned that you can -- it feels like you can see the light at the end of the tunnel. And I'm just kind of curious, is that kind of a suggestion that you can maybe said differently you can see the bottom? Or what green shoots did you -- were you kind of looking at to suggest that?

Well we stay in close contact not only with our dealer partners around the world, but our end customers and prospects and the pipeline that we have in the various businesses. If we look at a market let's say, if we take Asia, we can start to see business coming back in parts of Asia. So, if we take a market like China, now China is a small portion of Trimble these days less than 2% of revenue. But we have started to see business come back. If we look in the Nordics, we can start to see some of the business coming back as well. And so there's a bit of a geographic overlay to that Rick that informs the point of view that we feel like we're seeing a light at the end of the tunnel. As we look in North America and the governments are local -- and I'll say local governments are starting to talk about return to work or lifting some of the restrictions that it certainly plays into some of our psychology of seeing people getting back to work. They can be on the other end of that phone call for the demand side of this equation.

I got you. Okay. And can I just ask one more question. I think, I just wanted to go back to the -- you had mentioned you're entering the second quarter with -- I think it was $1.2 billion -- $1.2 billion of backlog. And I didn't catch the rest of the comment. There was a reference to $250 million, but the strong backlog again defers no cancellations. I mean you're basically just seeing project pushouts. Is that...

Hi Rick, it's David Barnes. Yes the $250 million is the backlog of our leading up the recurring business. And the point I made is that amount is higher than it was a year ago. And now we haven't seen any meaningful cancellations yet. There are as you inferred some delays but nothing in our backlog is being canceled of any consequence.

Okay. Very good. Thank you.

Thank you. And our next question comes from Devin Au from Keybanc Capital Markets. Your line is now open.

Hi. Thanks for taking our question. Just one for me. So I know you mentioned utility and construction are still performing. Just wondering if you could provide any color on other industries and geographies that you are seeing that are kind of underway back to normal level towards the end of I guess, April and thus far in May that you're seeing?

Well the markets that we see coming back to some degree are in some of the Asian markets I'll use China as an example and in the Nordics in Europe where the couple of examples I pointed out that would be current time. If I look at Q1 itself, I can use Brazil as an example, where we had a strong quarter in Brazil both in the agriculture business but even more so in our transportation business in Brazil. And so there's pockets of performance around I'd say around the globe. I think you asked something -- I did miss the first part of the question around utilities can you repeat that?

Yes. That was just kind of looking an example that are kind of performing pretty well in first quarter but I guess are you seeing other industries that are I guess on their way back to normal level thus far in the second quarter?

The way I'd approach that is from a business model perspective the ARR was up 7% in the first quarter and certainly outperforming -- differentially performing against the rest of the portfolio. And so the businesses associated with that I think are the ones to highlight. So the construction related ARR that we have. The correction services business has performed a really outstanding performance in the quarter and where we see that business now as well. So those would be a couple of the spots I would point out in particular.

Great. Thank you very much.

You’re welcome.

Thank you. And our next question comes from Jerry Revich from Goldman Sachs. Your line is now open.

Hi, good afternoon and good evening everyone. I'm glad you're all doing well.

Hi, Jerry.

Rob your comments about gross margin expansion really stood out to be considering what I would imagine would be pretty significant declines in perpetual license sales. Can you just expand what level of perpetual license sales declines you're seeing in April? And how you folks are able to essentially guide to improving gross margin in this environment that really stood out to me? Thanks.

Well, if I took three revenue streams when we took the recurring revenue stream, we took the aggregate of software and perpetual software term software and professional services is the second category and then the third one being hardware. ARR is certainly the highest performer. And then in the -- I could reference you to the web tables that also break out the gross margin by these revenue types. And of course ARR is going to have the highest -- amongst the highest gross margins. And then if we look at -- and of course that grew in the quarter the ARR that was plus 7%. And on the other let's say book end would be the hardware businesses were at minus 8% year-over-year in the first quarter and are the lowest gross margin it's a category of revenue that we have. And then if we look at the perpetual software and the pro services that was down in the quarter and it'd be down, as well and therefore, extrapolate down in March, down in April as well. It's just not down as much as the hardware. So it's a kind of low single-digit range. And I'll just give you one more I guess nugget. Within that software category, we have about $80 million on a trailing 12-month basis of term license revenue that shows up as software not as a recurring revenue and that tranche within the software is growing nicely and is a profitable stream. So yes, you take the mix of that and you get the gross margin expansion which was clearly a major driver of the beat in the quarter on the EPS side.

And that's pretty resilient performance for the perpetual license business as well. Okay. And then in terms of the subscription offering so you spoke about accelerating the shift, can you just update us on the performance in terms of bookings growth in the transportation management system so far this year? And can you talk about relative to I think the $500 million target of subscription opportunity you have within the existing portfolio with integrator approach here? What's the cadence on translating that from perpetual license to recurring? Thanks.

So if we look at the transportation management system, business or product line that we have, more than half bookings in the first quarter came as a subscription bookings. So really actually outperformed our own expectations we have as we do offer both subscription and perpetual offering. And of course, probably goes without saying that having that subscription offering becomes differentiably a good thing for customers in a tighter cash environment to move to an OpEx model. It also expands -- we believe expands an addressable market into the mid-size carriers through the conversion. If I look at the other businesses, I'll give you a couple of examples within -- actually within Buildings and Infrastructure. So we have a mechanical electrical plumbing business that's well over $100 million in revenue same thing with the steel and concrete structure business. Both of which we think we have significant opportunity to convert to subscription. And so in fact in our MEP business, we launched what's called Accubid Anywhere. That is a subscription offering and it's off to a decent start. Our structures business -- and I'd say a number of other businesses in Trimble that we have put in the category of -- we have some subscription elements of those businesses, but they are small elements of the business and we're really looking to accelerate and do the work I'd say the groundwork in 2020 to be able to really move quickly as we come in to next year. So not all of these actions I'm talking about will turn into increased ARR this year. But what I would want you to hear is that we think this is the time -- in this moment of crisis, this is the time to move faster on these conversions. And so we're shifting resources around shifting priorities around so that we can come to market faster with these offerings. We think it's the right thing to do for the long-term health of the business. And at a time of uncertainty like we have right now I think that cause for us to be decisive and this is one of those areas where we really are I think taking decisive action to move faster.

And Rob, sorry, just a clarification. So transportation management you had mentioned that half of new bookings are subscription, but when you combine them subscription and perpetual what was the year-over-year growth that you achieved as a result?

No. So what I would say from an overall bookings perspective, if we just kind of step back and talk about software bookings or perpetual software bookings and let's separate January, February from kind of late March until now, the new bookings are off significantly at an aggregate level. And I would say, in fact, more than 50% down in these last few weeks. And that's quite consistent from what we hear in the market. So in the short-term the new bookings are really -- they really are taking a hit. Now you won't see that so much in the revenue today or in a Q2, Q3. It becomes -- this really becomes a factor of how long does this last? When we hit bottom, how long does that -- what's the nature of the slope out of it will determine how much of that plays into 2021. And so I do -- I should just note that that's what we see on the overall bookings level. And then if I was to get really specific about the transportation management system in the booking, we'll look at -- when we take a booking you want to make it equivalent to what a perpetual booking would be so that you understand the real underlying driver. So look at it on a multiyear basis so that you can equate it to the nature of what would have been a perpetual booking as you plan the business around that.

Okay. Thank you.

Thank you. And your next question comes from Colin Rusch from Oppenheimer. Your line is now open.

Good afternoon. This is Kristen [ph] on for Colin. Thank you for taking our question. Just a few operational questions. First, I was wondering if you could talk a little bit about your supply chain in Mexico on the hardware side just remind us how much third-party manufacturing exposure you have in that region? And what you're hearing from your suppliers as they remain under those stay-at-home orders?

Yes. So I would say Kristen, we have -- I'd say a meaningful part of our contract manufacturing comes out of Mexico in fact much more so than China. Of course, components come from China, but the manufacturing has a substantial elements in Mexico. And the short answer is -- is that we've been up and running. In fact in some cases, we've gotten more capacity from the contract manufacturers as other companies have either shut down temporarily or they weren't essential businesses whatever factor it may be that in some cases actually enabled resources, I'd say labor resources to move to Trimble product which helped in businesses like agriculture, for example in the first quarter that exceeded the expectations. We have one operation in Guadalajara that's under a state-at-home order that really isn't running at this point, but we had enough I'd say heads up on that to build a little bit of inventory and it happens to be a business where the demand is also quite down. So it hasn't been an impact. But where it really matters we've been up and running.

Okay. Great. And sort of speaking to the inventory point, I wanted to ask about your dealer channel and how much of that was under essential services? I think you mentioned some pre-buy activity ahead of those stay-at-home orders. So any commentary that you can provide on inventory build? Or what you're seeing in the dealer channel right now?

If anything, at this point in the quarter today, we would see really more of an inventory reduction or drawdown. I would say, there were certain parts of the channel in Q1 probably around the February time frame that were I think doing a little bit of buying ahead of the impending shutdowns. It's hard to discern exactly what the nature of the buy is. But we look at the levels of inventory right now, and we think that actually the dealers are being quite responsible overall. So it's really something we want to pay attention to, because it's in our interest that our dealers remain healthy and have liquidity. So we feel good about on an aggregate basis in all the businesses at the level of inventory that our dealers have. In terms of the essential nature of the businesses and how that impacts dealers, really for the most part on a global basis, our dealers have been up and running. I could go back to what Trimble does, feeding a growing population. It was planting season or it was and is planting season. In construction, we knew many of the projects were continuing to be at work and our customers were counting on us to be there as Trimble and also as our dealer partners. And same thing in transportation, you can imagine, the stress on transportation companies as they were moving essential goods and we needed to be there running for them. So, they've maintained being open for the most part. Of course, with the government had a complete shutdown with Italy as an example, we were also down during that time. And then -- but even on an interesting note in Italy, we were actually up on a year-over-year basis in the first quarter based on the strength of what that team brought into the beginning of the quarter and as well in the Geospatial business as well as the ongoing agriculture business.

Thank you so much.

Thank you. Our next question comes from Jonathan Ho from William Blair. Your line is now open.

Hi. This is John Weidemoyer for Jonathan. Thanks for taking the question. I just have one. Can you talk about your level of optimism regarding the potential for infrastructure stimulus spend?

Sure. So on infrastructure, I would say, we've got a mixed view. So let me take a global view first. If you look at the U.K., HS2 project got a notice to proceed. If you look at China, they've made some big infrastructure announcements. If we talk about the U.S., which I think is really what you're asking about. Well, what we know is our infrastructure is aging and that suggests that we're talking about when and not if something happens in infrastructure. So we are net optimistic that something will be happening on the funding side in the U.S. hopefully in the next package in the next relief package. But let's be clear that has not happened yet. I would note that many states in the last months or a couple of years have increased their own gas taxes. That enables them to take more control of their own destiny. But if we look at the flip side to be complete with the analysis, the FAST Act expires on September 30 and that needs to be either renewed or extended. If we look at state tax revenue that is greatly suffering and that would obviously benefit from some form of a federal backstop. And then we have the American Transportation Infrastructure Act of 2019. And there we still have bipartisan disagreement on how to pay for it. So there are a set of, I would say, what I would call negative or cautious factors, the flip side being that infrastructure is such an obvious and important place for us to make investments here in the U.S. and a logical -- would be a logical part of a relief package. But of course, we haven't seen it yet.

Thank you. That’s all. Appreciate it. That’s it.

Thank you. And our next question comes from James Faucette from Morgan Stanley. Your line is now open.

Hi, team. This is Eric [ph] on for James. Thanks for taking our question. Maybe just touching on a piece that may not be as topical, but understanding you're taking maybe a slower approach to acquisitions for now. But I'm wondering has the current environment sparked your interest in any new potential growth areas or opportunities you could look to be more active in the future?

Well, the first place we've looked in the current environment is internally. And in that respect, really pivoting we want to pivot faster -- I'll say, faster harder to the subscription model. We've referenced a couple of the software businesses. But I neglected to mention the announcement we made at CONEXPO that launch what we call Trimble Platform as a Service to essentially to bundle. Our machine controlling guidance with our construction productivity software to connect the office and the field together and which we think is a unique offering. And that to us is really the first place we want to think about and look. And so the extent at which we're leveraging balance sheet or P&L, because let's do the math, the movement from perpetual to a subscription offering does have a short-term drag to a P&L into cash. That's the first place that we want to look to that. Secondarily, as the market moves, whether that's geographies or end-markets, we will pivot fast to what the market makes available or what it has available. And just maybe as a small example. But I think meaningful is I take an example like a trade show. Well in our agriculture business in Brazil, the team in the first quarter did a virtual trade show in Brazil that had over 3,000 people attended. Extraordinary ingenuity and creativity from the team and I would call that taking advantage of what's available and taking action around what's available to us in an environment. Now you asked then about externally in acquisitions. And with that pivot how we think. I would say there wouldn't be a fundamental pivot is the short answer.

Got it that’s helpful. And then maybe just kind of sticking on some of the bundled subscriptions offerings, how are those being structured where there's kind of hardware and from like thinking through a replacement cycle side? Is there a cadence built into those offerings? And maybe like just how we should think about that?

That's a good question. So if we took an example -- I'll give you an example on agriculture and an example on civil construction. And an agriculture example, that looks like bundling our guidance hardware with our office software or office and field software with our correction services. So you can get that centimetre level accuracy on the farm that a farmer needs. That to me is, less about accounting and technology replacement. That's really about reducing friction in the buying process. Instead of three separate transactions, it can happen as one transaction at the proverbial point of sale. If we take the civil construction example and the technology, our Trimble Platform as a Service offering, we announced at ConExpo, that does have a technology assurance aspect to it. And so there we could see a cadence. Let's take an example of a GPS receiver. If we have a new GPS or really GNSS receiver available, we can use that to upgrade the kit that the customer has on-site to provide them the latest functionality. So technology assurance is a really meaningful part of the strategy. The technology continues to get better every year, not only the sensors or the hardware but really the firmware and the software. And so for us it's important to be able to have a continued touch point to be able to update that. To be able to update firmware and display software you have to have connectivity to the machine. And we have that through the telematics product lines. We have that will also integrate into this offering. Now if we get forensically -- forensic on the accounting of it, the accounting has what's called an SSP, which really breaks out the value into its parts. And so the accounting will dictate what will show up, on the P&L.

Got it. That’s helpful. Thank you.

Thank you. And that concludes our question-and-answer session for today. I'd like to turn the conference back over to, Michael Leyba for closing remarks.

Thank you everyone for joining us on the call. We look forward to speaking to you again next quarter.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect.