Greg Klaben - VP of IR Ken Kannappan - Director, CEO, and President Pamela Strayer - SVP and CFO

Dave King - Roth Capital Partners Tavis McCourt - Raymond James & Associates Paul Coster - JP Morgan Chase & Co Gregory Burns - Sidoti & Company Mike Latimore - Northland Capital

Good afternoon, my name is Blaire, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Q3 Fiscal Year 2015 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. [Operator Instructions]. Thank you. Greg Klaben, Vice President of Investor Relations, you may begin your conference.

Thanks very much, Blaire. And welcome, everyone, to Plantronics' Third Quarter Fiscal Year 2015 Conference Call. Joining me today are Ken Kannappan, Plantronics' President and CEO; and Pam Strayer, Plantronics' Senior Vice President and CFO. The information presented and discussed today includes forward-looking statements, which are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The risks and uncertainties related to such statements are detailed in our most recent 10-K, 10-Q and today's press release. For the remainder of today's call, we will be providing only non-GAAP metrics related to gross margin, operating expenses, operating income, net income, and EPS. We have reconciled these measures in our earnings press release and in our quarterly analyst metric sheet, both of which are available on the Investor Relations page of our website. Additionally, after the conclusion of today's call, a recording of the call will be available with information on our website. Unless stated otherwise, all comparisons of the third quarter financial results are to the same quarter in the prior fiscal year. Plantronics' third quarter net revenues were $231.8 million. Plantronics' GAAP diluted earnings per share for the third quarter was $0.71 compared with $0.80 in fiscal 2014. Non-GAAP diluted earnings per share for the third quarter was $0.79 compared with $0.76 in the prior year. The differences between GAAP and non-GAAP earnings per share for the third quarter consists of charges for stock-based compensation, purchase accounting amortization, releases of tax reserves, and the reinstatement of the R&D tax credit. Please refer to the full reconciliation of GAAP to non-GAAP in our earnings release. With that, I'll turn the call over to Ken.

Thanks Greg. Before I review the highlights of the quarter from a business standpoint, I would like to mention two items that are negatively affecting our March quarter guidance. The first and smaller one is the timing of the beginning and end to the March quarter, which has an approximately $4 million impact to revenue in the quarter because this Q4 starts early giving it weaker sales days between Christmas and New Year's instead of stronger sales days at the end of March. The second one is the impact of exchange rates on our revenue and profitability. With nearly half of our revenues from outside the U.S., the recent and rampant currency fluctuations have the potential to reduce our dollar revenues as much as the Euros revenue growth. The effect on income is larger as most of our costs, both product and operating expenses, are in dollars. But we do have some offsetting local currency expenses. The effect here could be as high as 18 months of operating profit growth. In the past, we have not highlighted currency as a great deal because movements have generally been slower and our growth is intended to make the impacts in a period relatively small. In addition, our currency hedging has offset a large portion of this short term effects. Pam will cover our hedging approach in more detail. While we hope that the devaluation of the Euro and other currencies, lower oil prices and other actions like these -- stimulus will help Europe and other regions with an economic recovery that will also lead to currency appreciation and a boost to our earnings. For now, our earnings are simply lower due to the FX rates. From this space, there is no adverse change to our strategic position or growth prospects which remain excellent. There could be an opportunity for recovery of the negative FX impact overtime. We will manage our business to optimize for our long-term competitiveness over current period results. During our third quarter of fiscal 2015, we achieved 9% top line growth driven by 24% growth in our Unified Communications revenues, 4% growth in our core enterprise revenues, and 6% growth in our consumer revenues. Against that backdrop, I’d like to highlight the following four key takeaways from the third quarter. First, despite significant currency headwinds, growth in our operating income was comparable to revenue growth at 10%. EPS was slower at up 4% principally due to a balance sheet loss due to FX and other income. Our operating expenses grew at a slower rate than revenue. Second, the Unified Communications opportunity continues to grow now and now represents a third of our enterprise revenue. While we continue to expect uneven growth quarter to quarter in UC, we expect healthy growth this calendar year. Given the increasing proportion of enterprise revenues coming from UC revenue along with the challenge in determining if our UC products are being used in UC environments or being purchased as future proved solutions, we plan to discontinue UC revenue reporting beginning with this year’s June quarter. This in no way implies diminished view of the UC market. Third, our product portfolio is extremely fresh and we have exciting new products on the way this calendar year. Our new portfolio focuses on the contact center and other intensive users have been exceptionally well received. We also believe we have outstanding portfolios in UC and Mono Bluetooth. Our efforts to extend from communications into related lifestyle segments for business professionals have also been very well received. Our new stereo, Bluetooth products have already grown to about a quarter of our consumer revenues from relatively low levels last year. Our BackBeat PRO wireless active noise cancelling stereo headphones and BackBeat FIT fitness focus wireless ear buds both earned 2015 Consumer Electronics Show Innovation Awards or CES in the headphones product category. Fourth, we continue to be recognized for operational excellence and continue to focus on quality and improving performance throughout Plantronics. In January, Mexico’s President presented us with two major awards, the first is the national quality award, the highest distinction for organizational excellence in Mexico. Similar to the Malcolm Balridge Award in the United States, this award recognizes companies and institutions that had achieved the highest standards of quality, operational performance, and competitiveness, and improving their commitment to sustainable development in the well-being of the community. Plantronics won this award in 2004, this is the first year we applied since then. This is a particularly notable achievement giving the increasing complexity of our business over the past 10 years. In addition to assembling our headsets, Plamex associates are working on helping design and produce software and firmware in an entirely different manufacturing infrastructure and plant than in the past. The Mexican government also gave us a brand new award called the Distinction to a Journey of Excellence that honors a company’s "consistency and commitment to continuous improvement in innovation throughout its history, high performance results, extraordinary commitment to the community, and organizational culture that warrants its competitiveness and long-term sustained development". In the past we have won numerous national and international awards in Mexico and elsewhere including the National Technology Award, National Logistics Award, National Labor Award and National Export Award. Plamex has also won the great place to work competition in Mexico over the last four years in a row including this year. In addition Plamex won the only award the United States gives international operations of U.S. companies, the award for corporate excellence in 2014. We are continuing to improve this outstanding operation with new initiatives in lead manufacturing, increasing automation, and implementing a new manufacturing execution system. We are beginning this year with a more efficient, more innovative, and more agile competitive company. We believe our position is as strong as ever. With that I’ll turn over the call Pam to discuss our Q3 results in more detail.

Thanks Ken. First an overview of our results. As a reminder, unless stated otherwise, all comparisons of our Q3 fiscal year 2015 financial results are to Q3 of the fiscal year 2014. Third quarter net revenues were $231.8 million, representing 9% growth. Non-GAAP operating income of $48.1 million, an increase of $4.2 million or 9.6%. Non-GAAP EPS of $0.79 per share is $0.03 higher than the prior year, an increase of approximately 4%. Given the significant impact of foreign currency exchange rate movements, particularly those of the Euro and British pounds to the U.S. dollar, I will be giving year-over-year growth rates of some key indicators both as reported and as they would have been had FX rates remained consistent with the same quarter in the prior year. I will refer to these as constant currency basis. I want to highlight a few key points in our financial results for the quarter. First, we achieved 9% revenue growth and 10.9% on a constant currency basis. Our revenue growth was primarily a result of 10% growth in enterprise revenues, driven by UC growth of 24%. Our total net revenue growth rates were comparable in all of our major geographies. Second, our operating margins remained solidly in our target range with record operating income and improved EPS, despite the increasingly negative impact from a strengthening dollar during the quarter. Our operating income increased by 19.6% year-over-year, a bit better than our revenue growth. On a constant currency basis, operating income grew by 14%. Third, we continued to target an improvement in our operating margin for fiscal 2016, excluding GN litigation expenses. But currency headwinds may constraint a meaningful improvement. Now I will cover revenue in more detail. Total net revenues for the third quarter of 231.8 million were up 19.1 million or 9% compared to third quarter last year. On a geographic basis, we recorded year-over-year revenue growth of 8% to 11% in all regions. Defying [ph] our key product line comparison to Q3 of last year and applied net revenues of $161.6 million were up roughly $15 million and 10.2%. UC was the principal driver for that growth with UC revenues of $53.5 million, up 10.3 million and 24% over the prior year. Core office and contact center revenues experienced 4% growth, driven primarily by the Asia Pac region and the U.S. Consumer net revenues of $70.2 million were up roughly $4.1 million and 6.2%, driven primarily by growth in our stereo products. Non-GAAP gross margin was 52% relatively flat compared with last year's 52.2% margin. In the prior year, we recorded a one-time benefit to cost of goods sold to correct accounting for products, warranty, and return. This adjustments improved our prior year gross margin by 113 basis points. Excluding this benefit, gross margins would have increased by 90 basis points year-over-year. In the current quarter despite a high mix of UC and consumer product revenues, our gross margins were strong due primarily to material cost savings and a lower charge for excess and obsolete inventory. Non-GAAP operating expenses were $72.5 million, up $5.4 million due primarily to increases in head count. In addition our legal expenses are up almost 2 million compared to one year ago associated with ongoing litigation. Offsetting these increases is a benefit of $1.7 million recorded in the quarter from a litigation settlement. As a percentage of revenue operating expenses were 31.3% down 20 basis points from the prior year of 31.5%. Our non-GAAP operating margin was 20.8%, relatively flat compared to 20.7% in the prior year. When you exclude GN litigation expenses of $1.9 million and exclude the unusual litigation gains we recorded this quarter, the operating margin would have been 20.9%. This is in our long-term operating model range of 20% to 23%. While our revenues and operating income grew 9%, our net income only grew 2% as a result of foreign currency losses recorded and other income and expense related to our balance sheet accounts. We recorded a loss of $2.6 million net of gains recorded from a hedging program. Our non-GAAP profit before tax increased 4.5% over the prior year. On a constant currency basis, profit before tax increased by approximately 15% over the prior year. Now I am going to tell you a few notes on our hedging program. There are a few components, one for the balance sheet and one for the P&L. For the balance sheet we hedged one month out against the forecasted assets and liabilities denominated in Euros, British pounds, and Australian dollars to protect our cash flows from those items. The largest foreign denominated accounts are accounts receivable and some operating cash balances. These hedged gains and losses are met against the economic gains and losses on these accounts in other income and expense which are below the operating margin line and are not included in our operating income results. However, they do impact our EPS. Our goal is to reduce the impact of short-term FX movements on assets and liabilities between the tender earned or incurred and the time they are settled. Our losses experienced in other I&E this quarter is a result of unhedged currencies as well as using a hedge of less than 100% on hedged currencies. These gains and losses are typically within normal levels but have not been significant enough for us to highlight them in the past. And now onto the P&L. Our hedging philosophy in the P&L is to reduce volatility in our operating income for planning purposes and we do that by locking in a narrow range of rates one year into the future. We hedge against the estimated revenue expense items denominated in Euros and pounds by using dollars to limit volatility while keeping these hedges more cost effective. Therefore we average hedges for our current March quarter during Q4 of FY14. We have therefore put some protection in place for operating income results but will begin losing that protection in the quarter ending September when rates begin to move significantly. It’s important to note that we do not hedge 100% of our estimated exposure in these currencies because over hedging has a longer term negative impact on our accounting should we get the forecast along. I have describe the impact from having our reporting currency in U.S. dollars, however, Ken has stated earlier, the stronger dollar has negative impacts to our business that are not easily quantified and cannot be hedged against such as the impacts to our top line growth and our gross margins in foreign countries where we sell in U.S. dollar. Product pricing maybe impacted and other concerns exists, for instances we deferred revenue this quarter from our business in Russia due to concerns about collectability. Our effective non GAAP tax rate for the quarter was 27%. We recorded the benefit related to reinstatement of the R&D tax credit in December. Similar the last time this happened we booked three fourths of this credit for the GAAP only results, the benefit related directly to the December quarter is recorded in our non-GAAP results for the December quarter. The tax rate has remained at 27% for the full year on a non-GAAP basis as this tax credit savings was offset by a mix of income towards higher tax geographies. As a result of all these items our Q3 non-GAAP net income of $33.6 million was 2% higher than a year ago, yielding non-GAAP EPS of $0.79, up 3 pennies and approximate 4% from last year’s Q3 results. We estimate currency movements versus the prior year reduced our EPS results by $0.10 per share on this December quarter. Now on the balance sheet and cash flow highlights, we finished the quarter with 484 million in cash and investments on our balance sheet and generated over 28 million in cash flow from operations during the period. Of the 448 million in cash and investments at quarter end, approximately $41 million was domestic. We used $8.5 million to repurchase shares during the quarter, and we used another $6.5 million for payments to dividends. DSO was 61 days, up 5 days compared to the prior year. This increase was primarily due to billing linearity, specifically a higher percentage of our business done in the second half of the quarter when compared to one year ago. This linearity is primarily related to when the Holidays fall relative to the end of our fiscal quarter. Turning to our capital expenditures, our Q3 investment was approximately $6 million and 2.5% of net revenues. Expenditures include facilities improvements and equipment and tooling for our operations. We expect capital expenditures in Q4 to be a little higher anywhere from $8 million to $10 million. Total CAPEX for FY16 is expected to be $35 million to $40 million, approximately $9 million of that is related to our new headquarter facility in the Netherlands. Depreciation expense for Q3 was $4.8 million, up $1.1 million from the prior year. Turning to the outlook, we believe total net revenues for our fourth fiscal quarter ending in March will be in the range of $205 million to $215 million. This forecast assumes gross margins to be around 53.5%, the same as last year’s Q4. At the midpoint of this revenue range we would show a year-over-year growth rate of 0.4%, however, on a constant currency basis the growth rate built into our revenue guidance will be 2.9%. Depending on revenue mix and other factors, we believe our GAAP operating income will be approximately $32 million to $37 million and non-GAAP operating income will be approximately $40 million to $45 million. The GAAP reconciling items we expect in the fourth quarter include approximately $8 million in stock-based compensation expense and purchase accounting amortization before tax. As a reminder, we are including GN litigation cost as part of our non-GAAP results based on our policy for non-GAAP reporting. We are forecasting Q4 expense associated with this litigation to be approximately $1.5 million. We expect the expenses for this lawsuit will be fully offset by the recognition of a litigation gain that we expect to report in the quarter related to a binding agreement with one of our competitors to dismiss litigation. However, the GN lawsuit is in the discovery phase, and the associated legal expenses are particularly difficult to forecast. Actual expenses can vary significantly from our forecast. Our non-GAAP tax rate for the quarter is expected to be 27%. Based on all of the above, in the fourth quarter we expect GAAP EPS of $0.55 to $0.63 per share and non-GAAP EPS to be $0.67 to $0.75 per share on average diluted shares outstanding of approximately 43 million. We estimate the currency exchange rates will have a negative impact to our non-GAAP EPS guidance of approximately $0.05 per share. Our business fundamentals and market position are solid and we estimate that the combined impact of foreign exchange headwinds and the timing of sales days in the quarter account for nearly the entire delta between the guidance we are providing and what would have been a very good March quarter. With that we will open the call for questions.

[Operator Instructions]. Your first question comes from the line of Dave King from Roth Capital. Your line is open.

Thanks. Good afternoon everyone. I guess first I appreciate all the color on some of the currency impacts. I just had one point of clarification. Did I hear you correctly Pam that the guidance for the March quarter assumes 2.9% year-over-year growth in constant currency, is that what you said and then maybe just generally speaking, Ken can you just talk about what's happening as a result of currency, are you starting to see any weaker demand as a result of it in some of the markets where you do sell in dollars, etc., and then I guess which is -- I will start there, thanks?

So, let me let Pam cover the first part of that and I will…

Yes, so the answer is yes. I said 2.9% year-over-year growth adjusted to constant currency.

So, other than that, let me just say that honestly that we -- the only other real effect on this March quarter which I mentioned which does effect the growth rate that Pam outlined is that the quarter is a little bit shifted, so that results in somewhat weaker days this quarter than a year ago. I would say that in general what we have seen so far is that the pattern of demand is following our normal seasonal pattern of demand. It is still early in the quarter, so forecasts are never known for certain but that's what we believe we’ve seen. I would say that there are going to be winners and losers in the economic environment as there always are. Certainly, we have already seen some impact from what I would call -- oil economies and/or oil companies where particularly contract drilling and other firms that have got a sharper impact from it, but at the same time, there are going to be beneficiaries from the changed environment, so as it relates to the dollar itself, we are generally selling in most major markets in local currency, so the effect for us is not that people are necessarily buying less as a result of the currency becoming cheaper to the dollar, the effect for us is one of -- we realized slightly lower revenue and much sharper to lower profits.

Okay, that helps. And then maybe thinking about it in terms of the various businesses, that guidance maybe used in constant currency to kind of keep it fairly neutral [indiscernible], can you talk about what the guidance assumes sort of by business line, enterprise, the two components and then the consumer business?

Sure, I will start with the OCC business. It really does assume a relatively flat year-over-year growth rate. We are forecasting UC revenues to be in the high teens in our growth rate year-over-year. On the consumer side, I don’t have those right in front of me…

Yes, Dave both consumer and enterprise gets affected equally by the currency headwinds we are facing. There is not a greater effect in either of the product lines in those categories.

Okay. Thanks for the color off the back. Thank you.

Your next question comes from the line of Tavis McCourt from Raymond James. Your line is open.

Hey, thanks for taking my question. Pam I just want to make sure I understood your comment regarding the P&L hedging. You made a comment that you hedged one year in advance. I want to make sure I heard that right, and if so if the differences between the recognized revenue and constant currency revenue, are those the differences assuming that you had no hedging program at all or what is that, I guess, what I am getting at is are you feeling the burden of the $1.13 [euro] today or is that something that you will feel in the future because you are hedging today for one year out?

Yeah, so we do hedge one year out. The constant currency numbers that I disclosed take a look at what we expect to be the FX currency impact in our revenue offset by our current hedges that we have outstanding, so the hedging gains are both considered in that. So, what’s the next FX impact for revenues. If we had -- one of the challenges as I said earlier as we don’t hedge 100% so we are still going to have some exposure there.

Okay, so if all the hedges weren’t there, it’d be much worse, this is the net of the hedging activity because you don’t hedge on it -- I got it.

Yes.

But let me make one comment, the balance sheet losses are kind of a one-time phenomenon as you go down. Once you are at a steady level, then you wouldn’t incur any balance sheet losses.

Yes, that I understand, and for the March quarter guide have you guys assumed any balance sheet losses?

We have assumed a balance sheet loss there as well as the -- from the start of our quarter by the time we did the forecast, the currencies had depreciated further.

Yes.

Just to give you some perspective on that. I mean, the Euro has declined about 8% since the end of December and about 11% since the end of September.

Yes, I suspect most of us are aware on the call. My other question Ken is, last year I think your consumer business was held up a bit by some component tightness in some of your Bluetooth wireless skews, one or some I forget, but is there anything as you look into planning for this Holiday year in the consumer business, any component tightness that you see as a potential or do you think that will be a little better executed?

So, let me explain that one actually, there was a single product only, and to be precise it was our BackBeat FIT, for which we had a component limitation and long and short that the forecast significantly exceeded the capacity of one of our suppliers, and they were simply not in a position to raise their production in any reasonable timeframe, and it was not effective to redesign the product which was heavily dependent upon the unique performance of that component. And that situation has persisted and continues to persist. There are no real limitations we have on any of our other products other than normal kind of startup effects that involve new products as we are ramping them up. So that’s a one-off unique to that particular product. It remains capacity constrained, and we have not been able to release it to all channels that were interested in that product. Ultimately, that will get fixed in the future, but that is a continuing item which we knew would be long standing.

Got you and then last question on the GN litigation expenses and the offsetting gains, is the March quarter the last quarter of the offsetting gains and any update on the visibility of how long this discovery process will last with the GN litigation?

So let me go ahead with that, yes, this is the last quarter of the offsetting gains from that item. We don’t really have any visibility. We have to assume that this will continue unless the other party decides that it’s not productive for them to pursue it or it finally reaches a summary judgment or other trial conclusion.

Okay, thanks a lot.

Your next question comes from the line of Paul Coster from JP Morgan. Your line is open.

Thanks for taking my question. The first one Pam, I think I heard you say that gross margins would be around 53.5% in the next quarter, March quarter is that correct and if it is correct how does that reconcile with Ken’s comment about sharply lower margins owing to the hit you are taking on sales into international markets at the moment?

So I did say 53.5%, that’s what’s baked into our forecast right now. It’s kind of unknown and difficult to quantify what the pricing impact might be in Q4. So yes, I mean there might be some pressure that we experience there. I want to remind you that we do have hedges on our peso which protect some of our cost of goods sold and margins.

Okay. Second question is the 2.9% growth on those constant currency basis also it’s a little bit difficult to reconcile with the overall CAGR that you’re expensing from 13 through 18 based upon your presentation material pages 12 and 13 for instance which are pointing to 13% overall CAGR growth 17% to 18% growth in the enterprise, why are we disconnected from that kind of growth rate at the moment?

Okay, there is a couple of things going on, the first one is again this particular quarter, the March quarter does have a slight timing negative which accounts for a portion but not the entire amount of that. The second one is that at least in my mind the negative impacts are falling quicker than the positive ones as the economy shifts a little bit. So we have in fact had a number of customers that have had to cancel plans that were severely affected by the economic issues and again I refer to particularly the oil related industries. And so I think that’s another thing that has affected it.

Okay, got It. Thanks very much.

Thank you.

Your next question comes from the line of Greg Burns from Sidoti & Company. Your line is open.

Yeah, so the question about the new portfolio of UC, I mean our conference center products just wanted to maybe get a little color on the acceptance you are seeing in the market and maybe you’re seeing a little bit of a beginnings of an upgrade cycle from those new products?

Yes, I think we are getting a tremendously positive reception. Now these products tend to ramp more slowly than you see in other parts of our business as in general people take some time to test them, to assure themselves of the durability and longevity as they’re used in both contact centers and other intensive applications where people are very, very, very job dependent upon the item. I think also in this case there are going to be some integrations which will take a little bit of time to be completed with partners. So we expect a long ramp as we often see in this space but again the initial responses is extremely positive.

Okay and I guess CSU brought out Wearable Concept 2, with these concepts headsets what is the strategy there, are you – the challenges built-in headsets, is there a roadmap to bring them, launch them commercially in your broader headset line, like what is the strategy behind kind of these concept headsets in bringing those technologies and functionalities to market?

So one of the things that we’ve learned in the area of contractual intelligence is that it’s about the ecosystem not just about what we launched. So this gives an opportunity for developers to put together applications that are based upon this technology to create solutions so that the market is more fully developed at the time that we’re looking at launching final products. So the timing is not strictly defined at the time that we do these concepts.

Okay, thank you.

[Operator Instructions]. Your next question comes from the line of Mark Latimore from Northland Capital. Your line is open.

Yes, good afternoon. Ken I think you said there was unassumed balance sheet loss in the fourth quarter as well that relate to FX, can you say what the size of that is?

Yes, it is estimated to be about $1.5 million to $2 million at this point.

And then it does look like your March quarter guidance for revenue is down a little bit more sequentially, even adjusting for the constant currency and the shorter quarter. I guess is that where the kind of the oil category comes in?

Yes, that’s part of it. I mean it’s not the entire extent of it but again I would say that the other thing that happens to us is that we also just simply have timing issues as to when we expect business to occur.

Right, okay. And then on the contact center side of things, roughly what percent of your hedge is going to contact center side of it?

Well, this is how we spend sort of a murky area because we can sell the same products to the same distributors, to the same resellers that can go to the same company, that can be used on different floors of the same building for contact centers and other people. And so it has always been a very, very tricky thing to measure since it is really not a separate market, it is really two different parts of the single market. But I would say that we think it is probably around 25% to 30% of our total enterprise revenues going into that space.

And just last, I mean, historically you haven’t been focused on acquisition too much, or acquisition is still kind of a low priority?

Yeah, I think that acquisitions are always possible and there are two types, there are those that are opportunistic and those that are essential. Something essential is we are looking at our growth strategy where we need to go. We don’t have the tools to get there. We need to get something else and it makes more sense to buy it than it does to partner with a key partner to get there. Ordinarily we tend to partner. It is a technology that's a broader applicability than just our space. They can use it in other spaces. We can use it in this space and work with that company. And that's what we do most of the time where we don’t have the resource internally. But if there were something essential that came along we would absolutely look to strategically buy it if we could. On the opportunistic side, you never know where there is something that may pop up that makes financial and strategic sense and suddenly becomes available. We are not aware of anything that fits all those bills but it is always possible.

Okay, thank you.

There are no audio questions at this time. I will turn the call back over to the presenters.

Thanks very much everyone for joining us today. If you have any follow up questions we will be available afterwards. Thanks again.

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