Good day, ladies and gentlemen, and welcome to the Cree Second Quarter Fiscal 2018 Earnings Conference Call and webcast. [Operator Instructions] I would now like to hand the floor over to Raiford Garrabrant, Director of Investor Relations. Please go ahead, sir.

Thank you, Karen, and good afternoon. Welcome to Cree’s second quarter fiscal 2018 conference call. Today, Gregg Lowe, our CEO and Mike McDevitt, our CFO, will report on our results for the second quarter of fiscal year 2018. Please note that we will be presenting non-GAAP financial results during today’s call and a reconciliation to the corresponding GAAP measures is in our press release and posted in the Investor Relations section of our website. Today’s presentations include forward-looking statements about our business outlook, and we may make other forward-looking statements during the call. Such forward-looking statements are subject to numerous risks and uncertainties. Our press release today and the SEC filings noted in the release, mention important factors that could cause actual results to differ materially. During the Q&A session, we ask that analysts limit themselves to one question and one follow-up so that each analyst has the opportunity to ask a question within our allotted time of one hour. If you have additional questions, please contact us after the call. Now, I’d like to turn the call over to Gregg.

Thanks, Raiford and good afternoon, everyone. For today's call, I'll briefly discuss our financial results, after which Mike will provide more detail regarding Q2 and our Q3 outlook. After that, I'll provide an update on the strategy review process that we embarked upon last quarter. Now, moving to our Q2 results, our revenues exceeded the top end of our range, driven by strong demand from Wolfspeed and LED. Lighting revenues were at the upper end of our target range. Gross margins for Wolfspeed were good and within our expected range, and slightly below target for LED. While lighting gross margins were down significantly, due primarily to a larger than anticipated warranty reserve and lower factory utilization. EPS was at the low end of our range, but would have been at the top end of our range, exclusive of the increased warranty reserve. I'll now turn it over to Mike to provide more detail on the quarterly results and the outlook for next quarter.

Thank you, Greg I will be providing commentary on our financial statements on a non-GAAP basis, which is consistent with how management measures Cree’s results internally. However, non-GAAP results are not in accordance with GAAP and may not be comparable to non-GAAP information provided by other companies. Non-GAAP information should be considered a supplement to, and not a substitute for financial statements prepared in accordance with GAAP. A reconciliation of the non-GAAP information to the corresponding GAAP measures for all periods mentioned on this call, is posted on our website, provided in our press release, along with the historical summary of other key metrics. For the second quarter of fiscal 2018, revenue increased 2% sequentially to $368 million, exceeding the upper end of our targeted range. Non-GAAP earnings were a $1 million loss or a $0.01 loss per share, which were at the low end of our target range. Our GAAP and non-GAAP earnings include additional warranty cost for quality issues identified for certain commercial lighting products during the quarter. Excluding these additional warranty costs, our non-GAAP earnings would have been $3 million or $0.03 per share and $0.02 above the first call estimate. Our GAAP earnings were $14 million or $0.14 per share, which exceeded our target range of a $0.25 loss to $0.31 loss per share. Our GAAP results were higher primarily due to the following factors that were not included in our targets. A $20 million after-tax gain in the fair value of our Lextar investment and a $16 million net tax benefit on the re-measuring of our US deferred tax liabilities to the new 21% US federal tax rate, which was partially offset by a reserve for potential future foreign withholding tax on certain foreign cash balances should we choose to repatriate that cash in the…

Thanks, Mike. Since I joined the company a few months ago, I've been around the world meeting with customers, partners and employees. And I've come away from that very excited about our prospects going forward. There are many things we're doing well, but at the same time there are even more opportunities to improve, which says to me there is meaningful upside for each of our businesses from where we stand today. Demand and excitement for our Wolfspeed products, silicon carbide power, as well as gallium nitride RF, remains very strong. Our silicon carbide platform is at the heart of the auto industry’s transition to electric vehicle. In the past six months or so, China announced the target to sell 7 million electric vehicles in 2025, nearly 20 times the level seen in 2016. France, Norway and the UK have announced timelines for the complete elimination of gasoline and diesel cars. GM, Toyota, Volkswagen, Ford, Daimler and BMW, have made announcements about investments in electric vehicles. Collectively, they have announced additional investments of nearly $60 billion in electric vehicles, with a significant number of new electric vehicle introductions over the coming decade. We're in the early stage of a substantial opportunity as EVs become more prevalent on the roads across the world, and our leadership position in silicon carbide technology positions us extremely well to capitalize on that strong demand that this technology will have over the coming decade. Likewise, the recent release of the new 5G radio standard sets the stage for large scale trials and commercial deployment, giving us a meaningful opportunity for our gallium nitride business over the coming years. GAN RF transistors are better able to satisfy needed performance in the primary spectrum bands being allocated for 5G services, those between 3.3 gigahertz and 6 gigahertz,…

Thank you. [Operator Instructions] Our first question for today comes from the line of Vishal Shah with Deutsche Bank.

Thanks for taking my question. Greg, just wanted to better understand the margin profile in Wolfspeed. About a year - more than a year ago, your margins in that business were above 50% and you're now in the 48%, 49% range. So as you ramp your products, is that the range we should be looking at as far as the longer term gross margin profile of Wolfspeed versus it’s concern? And then as far as the OpEx goes, how do you think the OpEx intensity is between the two businesses? Are you spending more R&D and percent of sales in Wolfspeed, or is it in lighting? Thank you.

Vishal, this is Mike. Let me answer your question for you. So Wolfspeed GM, if you go back last year, one thing you might have to keep in mind for the above 50% margins is when we were holding the business for sale, we stopped - we turned off depreciation. So actually if you go - if you look at our press release that came out, year over year margins - the 48.4% is actually an improvement year over year from that standpoint, with depreciation added back in. now, what I would say, as we turn on the new capacity, I think it's not going to be a linear rate as we ramp that. The initial production yields will be a little bit lighter, depending on how much capacity we're turning on. It won't get fully utilized all the way. So near term we'll have some variability, but over the course of time we would expect that we'd be able to improve the margins and get them up over the longer term into that 50% range. On the OpEx, as we're working on 150 millimeter substrate development, as well as new device development, I would say Wolfspeed as part of the overall profile, is a little bit heavier R&D mix as a percentage of those sales and we should build - we've fact - we're factoring that into our models.

Thank you.

Thank you. And our next question comes from the line of Craig Irwin with ROTH Capital.

Good evening and thanks for taking my questions. So the first thing I wanted to ask about is a common point of discussion with investors. A lot of people want to see you dispose of assets that people see as long term underperformers, specifically lighting products and actually LED components. And there are also people out there advocating the closure of the Racine facility given that you do have manufacturing in China. Can you maybe outline key things that we should look at as long term components, long term value points in these different businesses that can you retain them and would try value for Cree over the longer term?

We’ve been going through the strategic review and obviously we're not quite complete with that yet. We will be complete with that this quarter and we'll be rolling that out this quarter as well to all of you. So you'll get a little bit more insight into that. But basically the focus of that review was to analyze each of the business and really ask ourselves several questions. What was the unique value proposition or differentiation we had for that product capability? What markets cared about that? What were the dynamics of those markets? Were they growing markets, shrinking, consolidating, etc.? And could we be a clear leader in that market? And so I think we're making pretty good progress on that. I don't think we're at a point right now where we're ready to roll that out, but we will be this quarter. So what I would say is, if you just hold off on that a little bit, we're within a month or two of being able to roll that out.

Great. Thank you. And then as a follow up, there’s a lot of discussion about sapphire these days. So Cree’s had a relationship for a number of years with Lextar. And then I guess it was right around this time last year where the final handshakes with San’an were taking place and the final agreement was being negotiated and inked. Can you comment how the mix of LED lighting fixtures and LED components has maybe changed over the last couple of years? What the percentage maybe is or just if you could give us color on the mix of sapphire as a substrate material that’s used in either your lighting fixtures business or your LED chips and components business.

So Craig, this is Mike. We don't break out the sapphire versus silicon carbide mix, but think about it this way is where we look at where we're spending our R&D dollars and our investment dollars now is for where we can provide value and get paid from that standpoint. So it will tend to be in those more specialty type applications where we can do it. And then if we can leverage somebody else’s source of pie and thinking of the LED business overall as more a CapEx light model moving forward, is we’ll do that. So we're agnostic to how we do it, the stuff that we’ll do and spend our development dollars and our manufacturing will be areas where we can get value for that and make good margin.

Thank you. Our next question comes from the line of Brian Lee with Goldman Sachs.

Hey guys. Thanks for taking the questions. Maybe first, Greg on Wolfspeed, appreciate the commentary around the autos market opportunity. Obviously it's one you’re super familiar with given your background. Just wondering, can you help us maybe a bit more context with respect to Cree specifically, just how the company has been positioned historically from a power device perspective? I think that's where a lot of focus is in the market today. And then what's really changing here for the EV application with respect to the competitive landscape and how Cree stacks up versus traditional semis players like Infineon and others that clearly have had auto content for years and throughout various cycles and seem to be going after similar silicon carbide power opportunities. So just wondering if you can kind of level set us on the competitive landscape and where you guys have stacked up historically and where you see yourself in this new application spectrum.

With silicon carbide, I think is generating a ton of interest in the EV space, primarily because of the efficiency gains that you get with it and that translates into either greater distance per the amount of battery that you're going to put in a car, or smaller amounts of - less amount of battery for the same distance. So it's a pretty important metric if you will. You can either lighten the load or the batteries and with the same amount of silicon carbide capability. So it has a meaningful impact on the efficiency of electric vehicles. I mentioned about all of the various different announcements that have been made. I think EVs have clearly passed the “tipping point” and are moving more into the mainstream. We play in this role in a couple of different ways. One is as a material supplier to many of the traditional players that play in this space, as well as a chip supplier in this space. And so we're actually poised to take advantage from both ends of it I think. I think if you look at the market size that has been predicted by 2022, if just 4% of the cars in the world, actually less than 4% of the cars are electric, and by all indications it's going to be higher than that. This is a $4 billion to $5 billion market opportunity just for silicon carbide. So it's a pretty giant opportunity. I think our position is very, very strong at this point. We’ve got pretty good connections with most of the players in this space and hence we're growing the capacity and growing the capability of the business.

Okay, fair enough. Just a quick follow up here on the silicon carbide wafers. Obviously that's one area of growth you're seeing and tightness as well. And just wondering on the go to market strategy, is that a contract - is that becoming a contract based business opportunity, or is still all in the spot market? And can you comment on how much out your visibility you might have locked in at this point given the tightness in the market, whether that be on volumes or pricing or both. Thank you.

Yes. It’s not a DRAM kind of market where there's a spot kind of thing associated with it. Certainly our customers, and especially as you well know in the auto industry, they don't buy for this month. They look at automobiles as a multi-year, most of the times, five year trends and so forth. We've been - I've met with many of our customers. They’re talking about significant demand requirements that go over the next half a decade and quite frankly beyond that. So I think you should definitely think of it more of a longer term type arrangement than any kind of spot market deal.

Our next question comes from the line of Paul Coster with JPMorgan.

Yes, thanks. Greg, just going back to your prepared remarks where you sort of summarized the strategic situation. I'm not sure I completely understood it. It sounded like you had a pretty constructive assessment of all three businesses and then at the end, you talked a little bit about how the strategic review is still under way. Are they as complete segments in scope or out of scope of as in terms of complete restructuring here? Or is the Cree we see today the Cree we’ll see tomorrow?

Well, we still have a little bit of work to do on that. I think we've - I would describe it as, we're sort of in the final stages of that. We’ve got an update scheduled with our board to give them kind of where we're at. And then obviously there will be some feedback and some input based on that and some fine tuning of the overall strategy. But I feel pretty good that we're going to be in a position this quarter to roll out the direction the company will be taking over the next half a decade to decade. And as I said, we'll roll that out later this quarter and we'll certainly give everybody an update as to when that will be and what form it will be. It will most likely take the form of an analyst Investor Day sometime later in the quarter.

Okay. Thanks. And then a quick follow up on Wolfspeed. Is it kind of game over and silicon carbide now is the preferred route forward for inverters and so on? Or is there still competition from the traditional silicon based technology?

I think we're seeing a lot of traction and excitement for silicon carbide, and it's just simply the basic physics of it. You just are going to get better efficiency using silicon carbide. Like you're going to get better efficiency using gallium nitride in the RF business. So both of them just have performance capability from a physics standpoint that just are better than silicon. That being said, there's always going to be improvements in silicon, like there is going to be improvements, continued improvements in silicon carbide and gallium nitride. So game over is probably a little strong, but we've certainly seen, as I described it before, as you might call it, a tipping point moving towards silicon carbide. And we've certainly seen that from the excitement of our customers, the demand that we're seeing, the longer term prospects and all of that.

Thank you. And our next question comes from the line of Harsh Kumar with Piper Jaffray

Yes. Hey guys. Two quick questions .first of all Greg, could you give us a sense of how constrained the Wolfspeed business is? I know you're adding capacity and hope to double and then hopefully double it again. But also maybe would that give us a sense of, following up on the previous question, not necessarily the silicon technology, but other compound semiconductors that are around and possibly what kind of a job they can do? And then also I believe this is the first time you guys are openly talking about 5G in applications. Is Cree now targeting those kind of RF applications?

Yes. We’re certainly constrained and we're working our tails off expanding the business as Mike talked about, doubling both the wafer capability and the semiconductor processing capability as well, the fab capability. So both of those are working pretty much around the clock right now. Based on the demand that we see going forward, we anticipate we’ll need to continue making those expansions beyond that, and pretty substantially beyond that. So the demand looks pretty robust for the coming quite frankly, decade. And we'll be kind of continuing to expand the capacity as the demand for our products continue growing. Relating to RF, we’ve actually been participating in that business actually for a little while. We supply chips to various different partners who then work with customers in the base station area. Based on our estimates, we're certainly a top player in supplying those chips to customers, a top player in gallium nitride. There seems to be a consensus I would say from the customer base that I've seen that customers are going to be moving towards gallium nitride RF products for the next generation base stations. I've heard a lot of different suggestions in terms of the percentage that will be GAN versus LDMOS, but none of the projections I've heard actually were below 50%. So they've all been above 50% adoption for GAN versus LDMOS. And it goes back to that frequency spectrum of 3.3 to six gigahertz. You just - you can't get the efficiency, the power and the performance out of LDMOS at this point. So we feel pretty good about that.

And then Greg, for my follow up, can I ask you to give me a sense of your external business versus your - the wafer business versus your chip business, what the breakdown is within Wolfspeed?

Harsh, we don't break that up, but both our wafer and device businesses are growing all nicely.

Got it. Thanks.

Thank you. And our next question comes from the line of Daniel Baksht with KeyBanc Capital Markets. Please go ahead.

Thanks. Could you comment on your backlog, whether it's softer, stronger sequentially? And with respect to Wolfspeed, do you think you'll be at full capacity following your capacity expansion at the end of 2018 with your current backlog? Thanks.

I'll let Mike hit the backlog here in a second. But what I would say is that I think after we complete the current expansion of the various different components of our factories, we are clearly anticipating the need to continue growing the capacity based on the demand.

And for overall backlog, our Wolfspeed backlog is very, very strong right now. We have some pretty good backlog in the LED kind of, but think of that as timing in advance of Chinese New Year. And then on our lighting business, it's in a similar range to where we were last quarter and that's including kind of basically the first week of our quarter was between Christmas and New Year’s. So light business then.

Okay, great. And then a quick question on the lighting margins. Given you're halfway through the year, do you continue expect that to increase in fiscal 2018 compared to fiscal 2017 now?

So we believe that we did a pretty good job of sizing up the warranty exposure with the items that we went through this quarter. So we think we get back into a more normal range. And basically if you look at the guidance, that would put the lighting margins kind of in the low 20s for this upcoming quarter. And we think we can kind of make some incremental improvement from there.

Thank you. And our next question comes from the line of Colin Rusch with Oppenheimer.

Thanks so much, and congrats on these design wins. Can you give us any sort of visibility that you have in terms of those design wins translating into booking some revenue and how we should think about the cadence of that rollout here in the auto sector?

Well, typically we haven't historically given much information on design wins per se. and I'll let Mike talk to that for a second. But typically what you see in terms of automotive is there's certainly a GAAP between when you win a design and when it goes into production. Depending on what system it's going on, that can be anywhere from two to five years. And what I would say is the growth that we're seeing right now is based on design wins that we've had over the last two to five years. The acceptance of electric vehicles as more of a normal thing as opposed to an oddity on the streets, is clearly there. The drive from a government standpoint with these various different government agencies that I talked about earlier, is setting timelines for the obsolescence of fossil fuel type vehicles. The need for cities to improve the quality of their - of the air to improve the quality of life for their citizens is a huge deal. Cars have a big impact on that. You’re seeing China talk about a 20x increase in terms of electric vehicles over the next couple of years. So I think it's a combination of the moons have really aligned pretty nicely. The acceptance of electric vehicles from customer standpoint, the ability to get multi hundreds of miles per charge, makes it a reality. The demand being driven by government agencies trying to clean up their cities and make things a lot better for the citizens, and their reality that silicon carbide is here, is real, is proven and is significantly more efficient than the current silicon based technology, I think just lines everything up for a real good run for us.

Great. And then as we think about moving towards higher wattage and higher voltage charging, could you talk about how many of the customers you're working with are focused on charging infrastructure? And if you could just give us a bit more detail about the cadence on that rollout as well? Obviously, the shorter charging times are critical, especially if you're going to be doing serious over the road applications. But want to get a sense of the number of opportunities you have on that charging side over the near term.

Sure. Hey, Colin, it's Raiford. Certainly an application we're working on, we haven’t announced anything specific in terms of who we are working with, with respect to design wins. But we're working with a lot of customers around the world. Suffice to say, there's a lot of design activity and you're right, there's a lot of interest around faster charging and that's something that silicon carbide is good at and something that we're working hard to get our products designed into that infrastructure.

Thank you. And our next question comes from the line of Edwin Mok with Needham & Company.

Great. Thanks for taking my question. On silicon carbide wafer or epiwafer, given that supply has been tight, have you seen competition coming from either new or existing play adding capacity, or even like other compounds wafer supply coming into this market?

Well, we've obviously seen the demand and we’re focused very much on increasing our ability to meet that demand and supply into that demand and so forth. We've talked extensively about the doubling of the wafer and the processing capability over the next year. The fact that we’ll continue growing that capacity for the foreseeable future for sure. And what I would say is in this industry, I think Andy Grove said it well, where you have to be paranoid. So you always need to worry about everything, and certainly we are. That being said, I've met with tons of customers and what I'm hearing from them is they need us to continue ramping up the capacity. Not that there aren't any alternatives, but we're the best path going forward.

Is it easy for customers to switch epiwafer supply or is it pretty much locked in once you kind of got qualified?

Well, I think the silicon carbide the hard thing to do. It takes years of experience. There is - it's not like you can go down the street and work with six different vendors to buy some equipment and set up a line. So what you can do in normal semiconductors, you can absolutely do that. So this takes a lot of know how. If you take a look at a lot of the equipment that we use to build our silicon carbide platform, it's all kind of customized stuff that we have specialized knowhow in. And so that makes it difficult. So in that kind of context, it's difficult to switch because it's difficult to switch to somebody that has that kind of knowhow. But I would add to that that the market that's really driving the substantial growth is the automotive market. And the automotive market has a very particularly sort of attribute in that it isn't sort of a - every year at Christmas they swap suppliers. These are long term agreements. These are products that go through extensive testing, a winter cycle, a summer cycle, many times through both of those before they get into a vehicle platform. And once you're in the vehicle platform, there's a very sort of stickiness associated with the supply base going into that. So it's really a partnership type approach where when you're in the platform, you're going to be in there for a long term. I used to - I've been in this industry for a long time, and what I would say is when a customer designs you win, they're basically engaging with you for about a decade. There's designing process. There’s the prototyping process. There’s the process of going through winter testing and so forth. There’s a ramp up process, and then there's the full production. And when you go from start to finish on that, it's a good decade.

Great. Just quick follow up on the LED, on the other LED option that you mentioned. I think you mentioned that the revenue was around less than a million and you think in three to five years, you can grow as much as 100 million. I’m just curious, do you - is that something that you have already have won the large design wins that is already in the books or is it a lot more wins that needs to come? I’m just trying to understand that $100 million number is that still require a lot more work or where do we stand on that?

Well, recall, I prefaced this by saying, we actually started this activity a couple of years ago. I think it was three years ago where the team decided to put a focus on developing high quality LED capability, high reliably capability that could be in the mainstream of the automotive headlight and daytime running light type applications. And so to the credit of the team, they began that effort several years ago. Design wins have been already - we've already engaged with customers and we do have design wins. We are ramping some of those products, I think as early as this year. So there's still work to do, but it's not - we're not starting from zero. We started this a number of years ago. And so you go back to what I was talking about earlier, so if you subtract three years and you say three to five years from now, that fits in very nicely with the normal ramp inside of automotive.

And then last summer we got our first design win or our first production design win on daytime running lights with a tier one supplier. Next opportunity we've got kind of locked in is turn indicators, but then working on a lot of headlamp opportunities as we go forward too.

Thank you. [Operator instructions]. Our next question comes from the line of Cindy Motz - Williams Capital.

All right. Thanks for taking my question. I just wanted to follow up a little bit. You had said on the overall industry, I think North America was still a little bit weak. Are you seeing any signs of life there? And then you did mention a little bit about tax reform in the upcoming quarter, but anything you could say about that going forward, just those two, like do you see maybe your customers getting stimulated by that in different areas? So thanks.

So it kind of - on the lighting side of the business, the Dodge index has shown some recoverment recently and then the economists are saying hey, low single digit growth through the rest - on non-residential construction through the rest of calendar ’18. So we think that's a little bit of encouraging sign. We’ll keep watch over that. Obviously this quarter you have the normal outdoor seasonality that you have to deal with, with the winter weather. Relative to tax law, those have spurred demand. I think it's early to tell. We think it's a net positive, but we’ll - the current impact is kind of hard to quantify how much near term business that will drive.

Okay. And then I guess just as a follow up, you talked through and gave some good information for next quarter on the margin. So just if I'm looking at it, if we get to let’s say low 20s with the lighting margins, and then maybe there might be a little bit of pressure you said on Wolfspeed. So that would imply then that the LED margins would go up a bit next quarter, I would think just if we're trying to get to like a 28% overall? Is that correct? Am I looking at that right?

Yes. On my commentary is that some improvement on lighting, but that both Wolfspeed and LED would be down, Wolfspeed a little bit, Wolfspeed kind of driven by the new capacity ramp and some of the initial production deals on that that we expect to kind of be in a better position as we’re exiting Q3. So we should see improvement in Q4. And then on LED, it's just lower seasonally due that we typically have in this quarter because you're running less volume through the factory.

Thank you. And our next question is a follow up from the line of Harsh Kumar with Piper Jaffray.

Hey Mike, I just put housekeeping question. You mentioned the 7% tax rate. I wanted to just understand if this 7% tax rate is for the next year or you want us to think about modeling this going forward from March and June quarter and then also next year?

So yes, the 7% tax rate is for the March and June quarters. Think of that as a fiscal ’18. I think when - if you start looking at fiscal ’19, it'll go up a little bit. I would - don't have specific guidance, but if you're thinking mid-teens next year, that's probably directionally accurate. And then over the longer range, as we continue to grow and increase the profits of the business over a longer range, it approximates what the US tax rate would be.

Thanks guys. Thank you so much.

Thank you and we also have a follow up from the line of Vishal Shah with Deutsche Bank.

Yes. Hi. Thanks for taking my follow up. Just, Greg, on the - just looking at the return on invested capital of the Wolfspeed business relative to the LED segment, especially the auto LED segment, do you think with the auto opportunities, do you think those returns are comparable or do you think Wolfspeed has better returns? And if that’s the case, does it make more sense to allocate more capacity to Wolfspeed relative to the LED segment? And then just realistically, do you think there’s kind of any synergy between lighting business and the Wolfspeed business? I understand that there’s some silicon carbide production capacity that’s used in the LED business. But do you think that there’s any kind of reason to keep those two businesses together? Thank you.

What I would say for return on invested capital relative to automotive for the Wolfspeed business or LED, the way we look at both of those, those are both attractive returns on invested capital. I think as mentioned earlier, our LED business, we have the focus on running that CapEx light going forward. So it's more about utilizing existing capacity. The other thing that kind of talked about relative to as we exit Q2, we've already started to kind of balance and use - make choices between Wolfspeed and LED production. And with that, we are still able to hit the best LED revenue that we've had in several years this past quarter. So I think we look at it as kind of one semiconductor factory that we can balance and make choices of to take advantage of all the opportunities that we have in front of us.

Thank you. And that concludes our question and answer session. I'd like to turn the floor back over to Cree for any closing comments.

Well, I want to thank everybody for participating in our call, and thank you for your interest in Cree. We look forward to updating you on our results in the coming quarter, but also updating you on the strategic direction of the company sometime this quarter and we’ll be letting you know when that's going to be as soon as we've got a date for it. Thank you very much.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may now disconnect. Everyone, have a great day.