Doug Sherk - Founder & CEO, EVC Group, Inc. Josh Levine - President & CEO Kevin Waters - SVP & CFO

Tycho Peterson - JPMorgan Steve Beuchaw - Morgan Stanley Brandon Henry - RBC Capital Markets Anthony Petrone - Jefferies Toby Wann - Obsidian Research Group

Welcome to the Accuray Q3 2016 Earnings Conference Call. [Operator Instructions]. I would now like to introduce your host for today's conference Mr. Doug Sherk. Sir, please go ahead.

Thank you, Liz and Good afternoon everyone. Thank you for joining us today as we review Accuray's third quarter fiscal 2016 financial results for the quarter ending March 31, 2016. Participating on today's call are Josh Levine, Accuray's President and Chief Executive Officer; and Kevin Waters, Accuray's Senior Vice President and Chief Financial Officer. Before we begin, I would like to remind you that our call today includes forward-looking statements that involve risks and uncertainties including statements regarding our business plans and strategies as well as our outlook for the fiscal fourth quarter and full fiscal year 2016. There are a number of factors that can cause actual results to differ materially from our expectations, including but not limited to risks associated with the adoption of the CyberKnife and TomoTherapy Systems, commercial execution, anticipated regulatory approvals and launches of new products, future order growth, future revenue and macroeconomic factors outside of the Company's control. These and other risks are more fully described in the press release we issued after the market close this afternoon, as well as in our filings with the Securities and Exchange Commission. The forward-looking statements on this call are based on information available to us as of today's date and we assume no obligation to update any forward-looking statements. During the question and answer session, we request questioners limit themselves to two questions and then requeue if you’ve any follow-ups. We thank everyone in advance for their cooperation with this process And now I would like to turn the call over to Accuray's President and Chief Executive Officer, Josh Levine

Thank you, Doug and good afternoon everyone. Thank you for joining today's call. In terms of our third quarter financial operating performance, we generated revenue of a $105.3 million which represents 8% year-over-year growth and is in-line with our objective of driving revenue growth that exceeds overall market growth rates. On a year-to-date basis in constant currency our third quarter revenue performance reflects growth of 12% compared to fiscal year 2015. We generated adjusted EBITDA of $13.9 million which represents a high-water mark for Accuray and demonstrates our continuing commitment to driving the business to a level of sustained profitability. Cash decreased by $6 million in the quarter, however this included the $5.5 million payment to settle litigation with our former Chinese distributor. Even with this non-recurring payment we’re well on our way to generating the first positive cash flow year in the history of the Company. We finished the quarter with a $150 million of cash on the balance sheet as of March 31. Kevin will provide greater detail on cash flow and the balance sheet during his section of the call. Gross orders were $56.4 million which were off bench mark in terms of our internal expectations but still represent growth 9% year-over-year. Importantly, we continue to grow our backlog which drives future revenue growth and finished the quarter at 7% higher than prior year. Net orders were $58 million, an increase of 60% over the prior year. Our net orders were positively impacted by two orders that previously had aged out but came back to revenue and the positive impact of foreign currency exchange adjustment. While we do not usually expected net orders to exceed gross orders, our net order performance in the third quarter demonstrates that given the company's definite age out policy and order that ages out backlog at the 30 month timeline does not necessarily mean the order is permanently lost. Turning to the quarter's commercial performance and topics related to our forward outlook. Gross orders in the quarter were impacted by three factors, the primary factor was the timing of a single large multi-system order in the U.S. we now expect this order to go to backlog in our fourth quarter. on a positive result as a result of our strategic account selling activity, we have been building a more meaningful pipeline of multi-system water opportunities. With that, said given our relatively modest overall unit volume of orders in any given order we’re more susceptible to this large dollar volume orders creating reasonably significant dollar gap for the quarter if order timing slips which was what we experienced in our third quarter. The second factor impacting the quarter's gross orders is the continuing to ship of TomoTherapy order volumes in single and dual vault settings. As most of you’re aware our success with Tomo in single and dual vault settings is occurring in smaller community and regional hospitals where we typically have had no prior relationship. This represent a very different account profile than our historical experience in large academy research medical centers. We’re finding that the competitive pricing dynamics with these accounts is becoming more aggressive. We are competing effectively in these locations and because they are primarily bunker conversion opportunities we believe that the economics involved are a net positive for us even at slightly lower average selling prices. With that said the success we’re generating in the single and dual vault settings is beginning to put modest pressure on gross order dollar volume which we have reflected in our revised gross orders outlook for the full year. The third factor impacting gross orders in the quarter was a heavier mix of TomoTherapy orders as compared to CyberKnife. In regards to this last point we expect CyberKnife order volumes to contribute to a larger gross order dollar volume in the fourth quarter as compared to the third. As we think about future growth catalyst, today we announced the submission of our 510(k) premarket notification to the FDA for our Radixact treatment delivery system. The Radixact system is the next generation TomoTherapy platform and is being designed to leverage it's unique architecture providing a main stream option for more clinicians. We expect to ship the first commercially released Radixact system to a customer in the European Union during the first quarter of fiscal 2017 and we will be unveiling the Radixact system at the ESTRO Meeting in Turin, Italy this coming weekend. We also announced today the submission of 510(k) pre-market notifications for our internally developed treatment planning and data management systems known as precision treatment planning system and IDMS data management system. The Radixact treatment planning and data management systems have been designed to work seamlessly together and improve treatment workflow processes. We expect this new platform to expand clinical capabilities while significantly increasing the ease and speed with which clinicians can provide precise radiation treatments. Multiple Radixact systems may use a single centralized database for treatment planning and patient data management. The Radixact system is designed to provide expanded clinical options for clinicians and innovative treatment opportunities for their patients. With that said it's important to note that we’re not yet able to take orders for the Radixact system. However we do have to take orders for our current TomoTherapy system which include a technology protection package meaning that if the Radixact system were to be available prior to the scheduled installation the customer could receive a Radixact system. Again customers attending the ESTRO Meeting later this week in Italy will have the opportunity to see the system and learn about additional product features. In addition we will provide a review of the design objectives of this platform at our Analyst Day in New York City on May 20th. Kevin will provide more detail on guidance in his segment of the call but as we think about our near term outlook full year gross order volume growth should be in the range of 5% to 8%. Support for this growth will come from continued penetration and market share gains by the TomoTherapy system in single and dual vault accounts. Continued momentum in replacement sales to enhance visibility to our TomoTherapy product road map, improved momentum in CyberKnife system sales in Q4 and book the large multi-system order that we originally forecasted for Q3. We’re also continuing to focus on our previously highlighted commercial initiatives and believe that these catalyst will support intermediate term revenue growth in excess of overall growth rates. With that, I will hand the call over to Kevin to discuss the quarter's financial results in greater detail. Kevin?

Thank you, Josh and good afternoon everyone. I will begin my prepared remarks with additional detail on our product orders, P&L and balance sheet before concluding with our financial outlook. Let's first address our gross orders which were $56.4 million. As Josh mentioned the primary variance between gross orders for the quarter and expectations for the quarter was a timing of a single multi-system order in the U.S. from the third quarter to what we expect will be in the fourth quarter. At the same time net orders of $57.6 million were above expectations. We had age out of $10.8 million during the third quarter which were offset by $5.6 million of orders that had previously aged out and were recorded as revenue in the third quarter. Net orders were also favorably impacted by positive foreign currency adjustments of $6.4 million and zero order cancellations ending product backlog as of March 31 was $370 million which again is a 7% increase over backlog at the end of the prior fiscal year third quarter. TomoTherapy orders in the third quarter provided strong year-over-year growth off set by relatively flat CyberKnife orders compared to the third quarter of the prior year. while CyberKnife made up a lower percentage of the overall product mix the InCise multi-leaf collimator was included in all of our CyberKnife orders. We anticipate the CyberKnife order volumes will regain momentum in the fourth quarter driven by the closing of a large number of replacement deals in the funnel and significant CyberKnife growth in the EIMEA compared to the fourth quarter of 2015. Staying with our discussions on orders, the timing of the multi-system order resulted in the Americas' region performing below expectations in the quarter. however on a year-to-date basis all four of our regions remain on track to deliver strong results. Additionally in terms of geographic contribution we still expect our America's and EIMEA regions to be the primary growth drivers in fiscal 2016. Moving onto our income statement, total revenues for the third quarter of $105.3 million represented an 8% increase from the prior year period. While the currency impact for the third quarter was immaterial it is significant on a nine month basis where revenues have increased 12% on a constant currency basis. Product revenues of $53.7 million in the third quarter increased 16% year-over-year. Both TomoTherapy and CyberKnife unit volumes increased with particularly strong TomoTherapy performance in EIMEA which was offset by lower product revenues in Americas region. Service revenues for the third quarter a $51.5 million were up slightly compared to the prior year period and in line with our expectations. Year-to-date service revenue increased $3.3 million, a modest 2% increase over the same period in the year. Gross profit was $44.9 million in the third quarter and our overall gross profit margin for the quarter was 43% a 300 basis point increase from the 40% gross margin in the year ago quarter. Both product and service margins improved in the third quarter compared to the prior year period. Product gross margins were a favorable 45% compared to 41% in the prior year, this was driven primarily by product and channel mix. Service gross margins were 40% which were favorable compared to the prior year period of 38%, this improvement is primarily related to the increased reliability of our systems and reduced employee related spending. Total operating expenses were $39.5 million up $2 million or 5% for the quarter. The increase was primarily due to the arbitration ruling that awarded attorney's fees in favor of our former distributor in China. This resulted in an additional $2.4 million expense in the quarter. This matter is now fully resolved and we don’t expect any additional expenses related to this arbitration matter in the fourth quarter. For the fiscal third quarter we achieved operating profit of $5.4 million which includes the $2.4 million of onetime arbitration related expenses, operating profits represented a five year high for our company and additionally we reported GAAP net income for the third quarter. Our adjusted EBITDA was $13.9 million for the third quarter which is also a five year high. On a year-to-date basis we have achieved EBITDA of $19.6 million which is a $14.5 million improvement compared to the first nine months of fiscal 2015. Turning to our balance sheet, we ended the quarter with a $149.8 million of cash and investments, a decrease of approximately $6 million as compared to the prior quarter. The decrease of cash during the quarter was primarily related to the onetime payment to our former distributor in resulting from the arbitration ruling of $5.5 million that was awarded in the previous quarters. For the first nine months of fiscal 2016 we increased cash and investment balances by $6 million driven by $11.5 million of positive cash flow if you exclude the onetime arbitration related payments. This compares to cash usage of $22.3 million in the first nine months of fiscal 2015. This is a cash flow improvement of more than $28 million. As Josh mentioned we’re well on our way to generating the first positive cash flow year in the history of Accuray. During the third quarter we also retired 63.4 million of the $100 million of convertible notes that were to mature in August 2016. The cash used to retire the notes was primarily funded by the $70 million of non-convertible straight debt financing we announced in our last call. We intend to use cash on hand to retire the remaining 36.6 million in August 2016. Regarding other balance sheet metrics, accounts receivable increased by $11.6 million compared to prior year, several transactions particularly in EIMEA where I noted earlier we had strong product revenues in the quarter will be settled by way of letter of credit that are typically due 30 days after installation. We anticipate that the increase in accounts receivable in the third quarter will contribute to increased cash collections in the fourth quarter. We believe the quality of our accounts receivable remain strong despite the absolute dollar increase during the quarter. This belief is supported by the fact that during the third quarter we experienced a decrease in past due accounts. Our inventory in the third quarter increased to $117.1 million representing an increase of 5% compared to the end of the second quarter. Inventory increase primarily to support manufacturing and collaboration units for the Radixact system we announced today as well as increases in service inventories to continue to maximize customer satisfaction. Current liabilities decreased by $44 million primarily due to the our convertible notes in the quarter and other normal account fluctuations. Turning now to our guidance for fiscal 2016, revenue is now expected to be in the range of $395 million to $405 million tiding the previously stated range of $395 million to $410 million. This refined outlook is primarily based on weak economic development we’re now seeing in Japan which also has been noted by our competitors. This weakness is manifesting itself in the form of construction delays causing longer conversion times of orders to revenue in Japan. As a result revenue in the fourth quarter is expected to be in the range of $91 million to a $101 million. With regards to the adjusted EBITDA we’re narrowing the range to $25 million to $30 million from the previous range of $25 million to $35 million. We now have full resolution of arbitration matter in China and excluding this onetime approximately $8 million expense, full year adjusted EBITDA would have been in the range of $33 million to $38 million which would have put us at the high end or even above our original EBITDA guidance. We also continue to anticipate operating expenses in 2016 or remain relatively flat at the high end of our revenue guidance just slightly down at the low end of our revenue guidance compared to fiscal 2015. We're also refining our full year gross order guidance to an expected range of $280 million to $290 million. If we achieve orders within this range we will generate gross order growth between 5% to 8% year over year which we estimate to be two to three times the growth rate of the overall market. This gross order achievement would result in fourth quarter orders of approximately $92 million to a $102 million. Our outlook for fourth quarter order growth as noted by Josh is based on the following factors. The orders we have received to-date closing the large. multisystem order we originally forecasted in the third quarter, enhanced momentum of TomoTherapy orders because of the roadmap we are now able to present to our current TomoTherapy customers and also improvement in CyberKnife orders in the fourth quarter as compared to the third quarter. With respect to future age outs and cancellations in fiscal 2016 fourth quarter net age outs are expected to be in the range of a $8 million to $11 million which would represent on a full year basis a year over year improvement in age outs as a percentage of average backlog. Finally on Friday, May 20th, we will be hosting an Investor Day in New York city. The upcoming event will highlight Accuray's technology road map including a more detailed review of our Radixact system announced today. The program will include presentations by Josh and myself as well as Chief Operating Officer Kelly Londy and Senior Vice President of Research and Development, Robert Hill. Additionally we will have presentations from key clinical opinion leaders as well as a question answer session. Now I'd like to end the call back to Josh.

Thanks, Kevin. We're encouraged by the progress in operating performance that our business continues to exhibit which is led to year-over-year growth in orders, revenue and EBITDA. We’re focused on the growth catalyst we have in front of us and we are excited about our future and now we're ready to open the call up for questions.

[Operator Instructions]. Our first question comes from the line of Tycho Peterson with JPMorgan.

Maybe Josh, just first on the gross order commentary. Can you quantify kind of the single large multisystem order that got pushed out and can you give any more color on the pricing dynamics that you talked about for a single and dual vault settings?

Yes, Tycho. The multi-system orders, as you guys have heard for really probably a role in four or five quarters. Now we've been very, very focused on strategic account selling activity. That selling activity is focused on IDN, GPOs [ph] etcetera and the primary reason that we have been focused on that is we believe that that's the best way to bring larger volume, dollar volume, multi-systems orders into play in terms of our opportunities and we're absolutely increasing the size and the funnel activity in the context of those types of accounts. So growing a number of funnel opportunities related to those didn't exist a year ago let's say at this time. So the opportunity set there is improving. The challenges that -- given the relatively modest number of total orders that we generate in any given quarter -- if one of those bigger volume situations or multi-system situation slips from quarter to quarter, it still creates a reasonably large degree of quarter to quarter variability or fluctuation for us. I wish that weren't the case but that's you know -- it's kind of really where we are at this point. I think the opportunity hasn't changed quite frankly at all for us, I think if anything it's actually increased just given the way the funnel is shaping up in terms of some of the multi-system deals but what happened in Q3 certainly was -- you know again from a timing expectation we expected that was going to happen in Q3 and now it's going to happen in Q4. So again I am not going to get more specific than that. We did say it was a U.S. based order and I think we'll leave it at that. Relative to the pricing, I think again just from a commercial focus perspective over the last at least the last four or five quarters we've been showing that we've been getting a lot of traction with TomoTherapy in single and dual vault settings and as we have started to see traction there and improved and continuing momentum there we’re moving into accounts where these are smaller community regional type hospitals. These are accounts that typically we have not had relationships with in the past. These are the vast majority of which quite frankly are competitive, bulker conversion opportunities for us and we're seeing more competitive pricing activity in those situations than we have in the past. I don't want -- I'm not panicked by that and I don't think that there's anything here that I would say is dramatic but you know even a modest impact on ASPs for us quite frankly will have potentially a significant impact when you when you multiply it in terms of a full year basis relative to it's direct impact on the decrease in gross dollar volume and right now we estimate that the lower ASPs as a result of these situations are probably contributed a $3 million to $5 million in gross order dollar volume versus prior year.

And if I look at the fourth quarter guidance you're down about 9 million sequentially at the midpoint of the range. You highlighted Japan, the construction delays is I guess the biggest win factor there. Is that the only reason for the tempered outlook and is there any light at the end of the tunnel there?

So just to be clear the reference that Kevin made to Japan I think was on the revenue side. We are seeing obviously -- I think the impact of economic headwinds there. There's a relatively significant backlog of larger construction projects in general in their industrial environment. There's labor shortages and we're seeing delays in bunker build-out and construction that are really directly related to that.

And just to follow up on Josh, Tycho, I mean the revenue guidance in Q4 being as you mentioned sequentially down is a direct reflection of Japan revenue. We’re probably looking anywhere from $7 million to $10 million on a full year basis in regards to construction projects in Japan that have started initial construction but will not finish insulation to revenue until up fiscal 2017.

Our next question comes from the line of Steve Beuchaw with Morgan Stanley.

My first question has to do with the Radixact launch. When I think back to the Tomo and CyberKnife launches in 2012 we had a little bit of an air pocket. You know between the time of the product's launch when they were shipping, and that created some challenges in the order funnel. How are you managing that this time around? What did you learn from that experience?

Well we learned that we need to be careful about being ready to release something before really it's ready for prime time and we're not going to make that mistake again quite frankly. You were kind of describing it as an air pocket. It was a painful process for us and we learned a lot from it. The good news here is that our existing TomoTherapy system, Steve, the H Series product has a ton of momentum and it's a very, very viable product. We're proving that in terms of the penetration we're making in really new account profile type customer situations in single dual vault type settings and so I think we've got a reasonably unique opportunity here in the same way that if you think about the way that the MLC has been a catalyst for system upgrade on the CyberKnife side, we actually think that Radixact could in fact may in fact have the same kind of impact on TomoTherapy replacement sale [ph] opportunities going forward.

I'm sorry I think you mentioned the shipment timing for Radixact in Europe, when would you expect to be able to take orders and ship in the U.S.?

So again we're not going to get specific about timing there with regards to product that's under 510(k) review. We look forward to working with the agency, you know their processing in the review of our application. I think that it's conceivable that our regulatory group if you think about the typical, the statutory response time lines involved in a 510(k) submission, we would think it's potentially possible that we'll hear back from the agency with regards to any questions they might have, with regards to the filing by the end of our fiscal year.

Our next question comes from the line of Brandon Henry with RBC Capital Markets.

First question, it looks like you made some good progress on both gross margins for both products and services this quarter. Can you help us understand the drivers of each this quarter and how sustainable you think this level of gross margin is and to kind of fiscal 4Q and into fiscal year '17?

Brad we’re not going to comment at your initial question on our fiscal 2017 guidance at this time, we'll address that on our next call. You know our increased product margins for the quarter are primarily just due to the channel mix to be honest. We had a larger number of sales in direct markets at higher prices than we have had in previous quarters. I stick to my comment at the beginning of the year that we expect very modest margin improvements on a full year basis probably in the 100 to 200 basis point range. Our current fiscal year gross margin guidance out there right now would give overall margins of 40% and that’s overall margins. On the service side, 40% is not the new run-rate of the business that we achieved in the third quarter. We had some lower employee compensation related expenses and we also had lower power consumption that we historically have experienced. So I don't want the takeaway to be 40% is the run rate on service margins. Again if you expect on a full year basis, very just modest improvements in the 100 to 200 basis point range.

And then separately can you provide us an update on what you're seeing in the Chinese radiation and oncology market? You know I think you previously said kind of what you were seeing on the ground differs from the weaker macroeconomic narrative in China. I think GE has talked about they're starting to see an uptick in Chinese tender activity here. Are you kind of seeing the same thing here?

Brandon, our view and the optics there have not changed at all. You know generally with regards to the China contributions, orders -- you know our revised order outlook in Q4. None of that order outlook revision depends on issuance of Class A radiotherapy so. We are in a good place regardless of what happens with regards to the timing of an announcement on the Class A licenses and on the second part your question. Just to be clear in the third quarter we moved five orders from the backlog to revenue that were orders in the backlog that were Chinese orders. So we're not at this point still not seeing any order cancellation or any construction project slowdown relative to customers who have orders in the backlog or are in the process of bunker construction in China.

[Operator Instructions]. Our next question comes from the line of Anthony Petrone with Jefferies.

Josh maybe and Kevin as well, maybe just a couple on gross orders and just sort of the outlook. I guess Kevin you gave a couple of items that are factored into the fourth quarter guidance. I guess I'm just wondering how much of that guidance range is actually reliant on other large orders such as the one that slipped in the third quarter and is there a risk that we’re going to continuously see larger orders in that kind of getting timing on those orders will become more difficult.

So what the factors that I referenced in my prepared remarks stated that you know we're only dependent in the fourth quarter on closing the one large multi-system order that we had originally forecasted in the third quarter. However to follow that up I think you know we have given a range as opposed to our point estimate which does reflect the fact that sometimes timing is outside of our control. But with that said we think the other factors primarily orders we have received already today continuing TomoTherapy orders because of the roadmap we're now showing these customers. And then lastly again, CyberKnife order funnel activity in the fourth quarter is going to be significantly improved as compared to the third. Give us right now you know comfort in our guidance range and the large sequential increase that you see. I think it's also worth mentioning if you look at the order pattern in fiscal '16 it's not terribly different than the fourth quarter that we had in fiscal 2015 where fourth quarter represented significant sequential growth.

Maybe just a follow up on that would be a age outs, and the whole notion that previously aged out orders could you know make their way back into gross orders in backlog over time. So did that occur in the quarter and do you expect that to occur in the fourth quarter?

Yes so it did occur in the quarter. So we had -- just to calibrate the numbers, 10.8 million of orders that aged out in the quarter, but with that 10.8 million, 5.6 million aged back in. So our net aged out number was more in the $4 million and on a year-to-date basis Anthony, we actually now have $11 million which represents four orders that have previously aged out and have gone to our revenue. If you look at that as a percent of all age out basis, it's basically saying that 20% of all our age outs year to date have eventually made their way through the funnel to revenue. Again just reinforcing our belief that once an order is aged out it's not necessarily a lost opportunity. So I would expect this to continue in the future.

This is Josh, let me just amplify in this. Just to be clear I don’t think that neither Kevin or I or anyone involved in the our commercial business operations you know Kelly Londy our Chief Commercial Officer, I don't think any of us would we be proposing or suggesting that you know we routinely expect net orders to exceed gross orders in terms of the dollar volume, right. I mean -- again I think characterized our gross order performance for the quarter as off benchmark. We had higher internal expectations. We know exactly what caused the [indiscernible] and the timing related to it and so I don't think we -- I just want to make sure that people aren't expecting from a step up standpoint that net orders going forward are going to exceed gross order volume you know kind of on a routine basis. I mean where we have a kind of phenomenon that Kevin -- that occurred this quarter that Kevin just characterized with those orders coming back in. You may see this occasionally but I don't think we should expect it on a rolling basis.

And then one last one would just be an update on the win rate, on existing bunkers. So the ability to retain the installed as those orders come up for renewal. Thanks again.

Yes. So in general I'd say that we probably are somewhere in the range of 70% of the deal opportunities were wins, we retained them. And I think we basically have said that essentially on a rolling basis going forward we expect something in the range of about 10% to 20% of total order volume being attached or connected to essentially those replacement opportunities.

And just to amplify Josh's comments, Anthony where we’re retaining 70% to 75% of our current bunkers. The remaining 20% to 25% are not normally competitive losses, what we're seeing there are the macro factors where bunkers are either consolidating or shutting down with entirely or are merging with other centers. So the other 25% are not going to the competition. And you know another number to highlight is 25% of all orders in this quarter were competitive replacements as well.

Our next question comes from the line of Toby Wann with Obsidian Research Group.

Quickly shifting back to China for a second, can you kind of give us an update if you will on your product kind of geared towards the Class B market and where we stand with that? Thanks.

That regulatory submission activity Toby, continues to be under review by the CFDA and again we have visibility already as part of their regulatory -- that their sequential regulatory kind of milestone process. U.S. FDA, 510(k) approval has to precede or would normally precede any final rendering that they'd make decision wise one way or the other, that 510(k) approval from U.S. FDA has already taken place. So that's a hurdle or a milestone that we think is a good sign. At this point it's tough to predict absolute timing but you know we generally we would imagine probably somewhere in the maybe six month kind of timeframe from where we are right now that would be a I think a reasonable expectation.

I'm showing no further questions in queue at this time. I'd like to turn the call back to management for closing remarks.

I'd like to take this opportunity to thank all of our Accuray employees worldwide for their contributions and the work we did in the third quarter fiscal 2016. To those of you listening in, thank you for joining us on this afternoon's call. We look forward speaking with many of you at our Analyst Day in May and again our fourth quarter call. Thank you very much.

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