Thank you and welcome to Aviat Networks' second quarter fiscal 2022 results conference call and webcast. You can find our Form 10-Q, press release, and updated investor presentation in the IR section of our website at www.aviatnetworks.com, along with a replay of today’s call in approximately two hours.

With me today are Pete Smith, Aviat’s President and CEO, who will begin with opening remarks on the Company’s fiscal second quarter, followed by David Gray, our CFO, who will review the financial results for the quarter and first half of fiscal 2022. Pete will then provide closing remarks on Aviat’s strategy and outlook, followed by Q&A.

As a reminder, during today’s call and webcast, management may make forward-looking statements regarding Aviat’s business, including but not limited to, statements relating to financial projections, business drivers, new products and expansions, the impact of COVID-19, and economic activity in different regions.

These and other forward-looking statements reflect the Company’s opinions only as of the date of this call, and webcast, and involve assumptions, risks, and uncertainties that could cause actual results to differ materially from those statements.

Additional information on factors that could cause actual results to differ materially from statements made on this call can be found in our annual report on Form10-K filed with the SEC on August 25, 2021.

The Company undertakes no obligation to revise or make public any revision of these forward-looking statements in light of new information or future events. Additionally, during today’s call and webcast, management will reference both, GAAP and non-GAAP financial measures.

Please refer to our press release, which is available in the IR section of our website at www.aviatnetworks.com and financial tables therein, which include a GAAP to non-GAAP reconciliation and other supplemental financial information. At this time, I’d like to turn the call over to Aviat’s President and CEO, Pete Smith.

Pete?.

Thanks, Keith, and good afternoon, everyone. Thanks for joining us to review a successful quarter. The Company continued to execute on our key long-term focus areas of growth, margin expansion, and meaningful bottom-line improvements, despite continued supply chain and inflationary challenges.

The Aviat team commitment resulted in revenue of $77.9 million, the highest quarterly revenue since Q1 of fiscal year 2016, driven by international growth of 25% versus last year, EBITDA margins of 13%, continued rock solid balance sheet and liquidity position, increased pace of share buybacks.

These results would not have been possible without the tireless dedication and execution of our operations team, engineering team and supplier partners in an incredibly challenging environment. Because supply chain has dominated the conversation over the past 12 plus months, let's address the environment from Aviat’s perspective.

We experienced fewer supply interruptions, but we still experienced interruptions, lead times did not improve, but fortunately, there were no high push-outs. This is a sign of stabilization. The semiconductor allocation environment remains. We have invested to design out the most problematic suppliers.

We remain subject to the risk of a supplier push-out and decommit late in the quarter.

The most significant question, when does the supply environment gets better? This is difficult to predict, but we feel that the environment will moderate in the April to June timeframe, and most, hopefully all of the supply chain problems are behind us at the end of December.

Now, let's move to the key highlights of the second quarter, which include our Multiband XD launch; high availability routing software, factory acceptance test success. Strong demand environment, led to RDOF, the infrastructure bill and spectrum auctions, EMEA growth, share buybacks.

In the quarter, Aviat released a new enhancement to our multiband product line, Multiband XD or Extended Distance, increases the reach of 10 gigabits per second links over distances up to 20 kilometers to support 5G and rural broadband applications.

To achieve comparable performance, competitive multiband solutions require upto 4 times the hardware, making them costly and impractical for tower deployments, leaving high cost fiber as the only option. Now, with Multiband XD operators can significantly lower their total cost of ownership by up to 90% when compared to fiber alternatives.

Simply, this innovation makes Aviat more competitive versus fiber. In the previous quarter, Aviat announced release of our new high availability routing software to improve the reliability of critical networks of all kinds.

This quarter, we passed a significant milestone with the successful completion of factory acceptance test or FAT with a large U.S. state customer. We replicated the entire state network in our facility in Austin, Texas, and subject the system to real world stress and performance testing, the software performed flawlessly.

Aviat is one of only a few vendors offering high availability routing, and we have a rapidly growing pipeline of deals for this new software. This opens an additional $300 million of market opportunity for Aviat. The environment for Aviat’s offerings continued to improve.

Let's touch on the Rural Digital Opportunity Fund, the infrastructure bill and the recent spectrum auction. We remain well positioned for the rollout of the Rural Digital Opportunity Fund or RDOF. As we track the RDOF winners, Aviat customers are earmarked for more than $3 billion of funding.

In the quarter, we announced a new customer Wisper Internet in the space. In November 2021, the U.S. passed the Bipartisan Infrastructure Legislation, which appropriates $65 billion for broadband infrastructure deployment. As a U.S.

company, Aviat is well-positioned to participate in serving the 42 million Americans for broadband coverage or who lack contemporary bandwidth. The FCC recently completed a $22 billion auction known as Auction 110 for the 3.45 to 3.55 gigahertz spectrum. The second biggest winner was Dish, our previously announced customer.

As this spectrum is utilized, Aviat's backhaul business will be positively impacted. Our international growth of 25% was driven by our Europe and Africa regions. In previous earnings calls, we discussed improvements in the team and leadership. We have our first proof point internationally where selling on value and Aviat’s differentiation works.

Some highlights include a win with an important Southeastern European mobile operator and momentum with a UK private network customer. We see the preparations for several 5G deployments in Africa, and we believe our portfolio has the best value proposition on the market for 5G in Africa.

This preparation work suggests the future development of a favorable 5G demand environment. We accelerated the pace of share buybacks during Q2, repurchasing almost $2 million of Aviat’s stock and exhausting the previous Board authorization.

As announced, the Board authorized a further $10 million share repurchase plan, and we anticipate executing on the new plan opportunistically in the subsequent quarters. Before turning the call over to David, let me provide a couple of additional observations and insights. First, this was a very good quarter, and first half of our fiscal year.

We remain focused and continue to execute, and those collective efforts are reflected in our financial and operational results. We've continued to demonstrate our ability to grow and to take share of demand.

Looking forward, we see three significant drivers, 5G, private networks, and rural broadband, and believe we are well positioned to capture significant opportunities with our differentiated products, software and services offerings. With that, let me turn the call over to David to review our financials before coming back for some final comments.

David?.

Thank you, Pete, and good afternoon, everyone. During my remarks today, I will review some of the key second quarter and first half fiscal 2022 financial highlights. Noting our detailed financials can be found in our 10-Q and press release both of which were filed this afternoon.

As a reminder, all comparisons discussed today are between the second quarter of fiscal 2022 and the second quarter of fiscal 2021 unless noted otherwise.

For the second quarter, we reported total revenues of $77.9 million, as compared to $70.5 million for the same period last year, an increase of $7.4 million or 10.4%, driven by international sales growth and continued strength in U.S. private networks. Sequentially, revenue increased by $4.7 million or 6.4%.

As Pete mentioned, our total revenue for the second quarter was the highest since our first quarter of fiscal 2016. North America, which comprised 66% of total revenue for the second quarter was $51.0 million, an increase of $1.9 million or 3.8% from the same period last year, driven primarily by our private networks business.

International revenue was $26.8 million for the quarter, an increase of $5.4 million or 25.5% from the same period last year. We are again pleased, that our backlog continues to remain above $200 million, even after recognizing our highest quarterly revenues in over six years, because of our innovative and differentiated product portfolio.

Gross margins for the quarter were 36.2% and 36.3% on a GAAP and non-GAAP basis, as compared to 38.2% and 38.3% in the prior year. Gross margins remained under pressure from inflationary headwinds and expedite costs related to supply chain disruptions, but improved sequentially from Q1 by 60 basis points.

This is consistent with our prior earnings commentary, where we noted that price actions to offset inflation would gain momentum as the year progressed.

Second quarter GAAP operating expenses were $19.9 million and second quarter non-GAAP operating expenses, which exclude the impact of restructuring charges and share-based compensation were $19.2 million. GAAP and non-GAAP OpEx were $0.8 million and $0.9 million higher than the prior year respectively.

The increase was driven by higher R&D costs incurred to complete the design out of problematic vendors, as well as higher commissions in line with strong orders and sales. Second quarter GAAP net income was $5.7 million compared to $6.6 million last year.

The decline was wholly attributable to a $1.8 million higher GAAP tax provision in the current quarter, which was from the release of the U.S. deferred tax asset valuation allowance as reported in our fiscal Q3 2021 results. As a reminder, the increase in tax provision year-over-year will not increase our cash taxes paid.

The Company has over $500 million of NOLs that will continue to generate shareholder value via minimal cash tax payments for the foreseeable future. Second quarter non-GAAP net income, which excludes restructuring charges, share-based comp and non-cash tax provision was $8.5 million compared to $8.4 million for the same period last year.

Second quarter non-GAAP EPS came in at $0.71 per share, compared to $0.74 per share for the same period last year. Adjusted EBITDA for the second quarter was $10.1 million, which was flat to the prior year. Adjusted EBITDA margins were 13.1% for the quarter. Moving on to the balance sheet.

Our cash and cash equivalents at the end of the second quarter were $42.3 million. We continue to have no debt. During Q2, we continued to increase in investment in working capital to facilitate higher sales growth and protect ourselves from supply chain disruptions.

Our strong balance sheet permits us to amass component supply and invest in international growth projects. As a result, accounts receivable and unbilled receivables grew by $12.9 million in the quarter. Additionally, higher international growth typically has longer payment terms than North American customers.

It also grew by $2.5 million in the quarter as we added more supply chain buffer stock. AR and inventory growth was only partially offset by current liabilities, which grew by $4.0 million in the quarter.

As a result of these notable increases and $2 million of stock buybacks in the quarter, net cash decreased sequentially from the first quarter by $5.0 million and by $0.7 million from Q2 of the prior year. We expect this working capital dynamic to moderate in subsequent quarters, returning us to strong positive cash generation.

Regardless, our balance sheet remains very solid, leaving us well positioned to execute our long-term plans. With that, I will turn it back to Pete for some final comments.

Pete?.

Revenue for fiscal year 2022 to be in the range of $290 million to $298 million, and adjust EBIDA to be in the range of $37 million to $39 million. Providing our customers with the most advanced, reliable and best total cost of ownership systems for mission critical work and our shareholders with profitable growth remains our goal.

With that, operator, open it up for questions..

[Operator Instructions] And our first question will come from Scott Searle with Roth Capital..

Hey. Good afternoon. Thanks for taking my questions. Nice job on the quarter. Very difficult operating environment. Maybe just to dive in quickly on the guidance for the fiscal year, it looks like it would probably imply that you are down a little bit sequentially into the March quarter, typical seasonality.

Is that how we should be thinking of it, above consensus expectations, but down a little bit sequentially from the December results?.

Yes. So, we’ve talked in the past about seasonality. Some years there are seasonality and some not, being a project-based business. And what drives the seasonality when we have it is year-end buying principally from our government customers, and we certainly had that this year..

Okay. And, maybe to dive in on the software component, I think you indicated about a $300 million TAM on that front. I wonder if you could expand on that a little bit in terms of software contribution maybe near-term and how you start to penetrate that opportunity..

So, that's around our routing, right, where we have high availability routing software for a state network, and that that project went well. We cited that that's a $300 million TAM and what we'll be selling -- when we have those wins, we will have microwave radio router and the embedded software.

And now that we've proven ourselves, our funnel is starting to grow. So that -- when we sell that embedded -- that routing software, that'll be as embedded software. With respect to our overall software, we are reluctant to break out the embedded software as a standalone, because we can only sell it in conjunction with hardware.

And then just to keep going on this, we do have our FAS, which is a standalone software, but it’s not -- it's helped our margins and -- over the past couple years, but it's not material enough to break out.

Is that helpful?.

Great. Perfect. And maybe if I could jump in on the RDOF front. It sounds like some of these RDOF deployments are starting to get underway. I think to-date you've seen very little, if any contribution. I think you articulated a $3 billion opportunity with existing customers.

How do you expect that to flow-in? And then, if you could, as well, the infrastructure bill. It seems like it's coming behind it. There's some politics probably in terms of the allocations and timelines there. But, there’s been a big push in terms of American made and you guys certainly fit that bill.

So I guess, how does RDOF kind of flow into the current calendar year and where do we start to see the benefits from the infrastructure bill starting to kick in?.

Yes. So, we think that -- we're not aware of any RDOF spending with Aviat yet. So, it's all yet to come. So, that's upside for the business. And our best estimate of when we can expect to see an RDOF impact is in the back half of this calendar year. So, it's in front of us, all of it.

And then, the building infrastructure fund or for the policy wants H.R.3684, there is four steps for implementation. First, the FCC needs to update their maps and we think that's in the summer time of this calendar year, then the Commerce Department is creating a process for states to apply. And that application from what's been published is May 2022.

Then the states will develop the plan for permission -- I mean for submission, and then they'll be reviewed and approved by the Commerce Department. And we think that that's the end of ‘22, the beginning of 2023 for that funding to make an impact..

Great. Perfect. And lastly, if I could, international had a great quarter, up 25% year-over-year. It seems like looking at it geographically, Latin America and Middle East and Africa did well.

Is that -- are you benefiting from Huawei tear outs or Huawei being less visible? And then, on the European front, big opportunities there, I think in terms of what you're starting to win, hasn't shown up in the numbers yet. When do we expect Europe to start to kick in? Thanks..

So, when we report our segments, Europe is up, driven principally by the private network in the UK, but secondly, we did have some good growth in the Europe region, driven by Huawei share gain. That was the Southeastern Europe network operator. And then, thirdly, on Africa, we are seeing some share gain from Huawei.

And what we're finding is that the 5G, a lot of our business in Africa this quarter was around 5G deployment. So, getting the sites prepped and getting demos done. So, we think that that's going to bode well for the Africa region going forward. .

Our next question will come from Dave Kang with B. Riley..

Thank you. Good afternoon. I guess, my first question is, I believe you said, regarding the supply chain situation that it should start to ease post June.

So, how should we think about gross margin in calendar second half? Does it go back to like 38% or so? Can you just provide some more color what to expect?.

I will comment on that by saying, yes, we're still on track with what we said previously, as far as our pricing actions being able to fully offset the cost increases that we've been seeing by our Q4 of this year.

And looking out at that quarter and beyond, we still expect the overall inflationary impact to be somewhat delusionary, because even though our price actions will offset dollar for dollar, you're also increasing the denominator while holding the numerator setting. So, that will have some impact.

But, we do expect as the momentum continues to unfold here that it will -- we’ll be able to hold onto those pricing gains and start seeing some better accretion on the gross margin line..

Dave, to just add on that, it'll be a little while before we give guidance for fiscal year ‘23. And the other -- what we'll need to balance is how much traction we have on our software, on our innovative new products versus the international growth.

But, Dave just said one important thing is that we still maintain that we're going to get back to parity from cost price in our April to June timeframe. So, then we're back to where we were before this environment took hold. And then it'll be -- our margin improvements will be predicated on mix and capturing more software, more innovation..

And then my second question is, on you talked about having various trials, number of trials last year that you expect those will go into production this year.

Can you just provide us -- give us an update or some data points exact -- how many trials you had, and how many you expect to go into production this year?.

Well, I'm struggling with a little bit what I meant by the trials, but let me give you the one -- one that I'm ready. We talked a lot about Multiband XD, our new product we have that's opened up another $50 million of TAM versus fiber, we're in two trials with lead customers.

On the high availability software, we passed the FAT with the state network customer, and we've sold that to maybe a half a dozen other customers. And the pipeline on the high availability routing software, we have another 5 or 10 customers behind there. So, when we think about our pipeline, we kind of parse it out by the innovative products.

And I think, to be as responsive as possible to your question on the Multiband XD, we have two, we have more customers on the high availability routing software, and we have about a half a dozen that are queued up for trials..

And my last question is on OpEx. It was up approximately $1 million sequentially to $30 million -- excuse me, SG&A.

How should we think about OpEx going forward?.

Well, I think, it's safe to say that we believe that our Q2 is probably the high watermark for OpEx in this fiscal year. Some of those extra expenses that we noted in the earlier comments should not recur, so they should moderate somewhat in the back half.

That'll also be balanced against some modest seasonality that typically exists in our OpEx, but it should be -- fall back a little bit and be more in line with what we've seen in previous years. .

And our next question will come from Tim Savageaux with Northland Capital Markets..

Trying to think about how to frame this question. I guess, I'll start kind of with a gross margin approach. And mix, U.S. versus international is typically an important factor. And so, I want to think about that both short-term and long-term.

The quarter you just reported, I think you were able to increase gross margins on what you said 60 bps, despite a much higher international mix.

So, I guess, question one, how did you do that? And David, I wonder if you could specifically frame the supply impact on that, whether that's a couple of hundred basis points or what have you? And then, longer-term, a lot of what you're talking about opportunity wise, appears pretty U.S. focused, right, RDOF, Dish, others, state level.

And so, should we think about that U.S.

mix increasing and bringing gross margins up with it or are there other dynamics at play here as we go through the rest of the year?.

Okay. I'll speak to the gross margin first and then Pete can take the international versus domestic mix. So, for the quarter, the cost increases impacted our margins by roughly 340 basis points negatively.

That was offset partially by our price recovery actions that added about 230 basis points, that's about 2 times what we reported in our first quarter. And then, you're right, the international strength did have a bit of a dilutive effect by about 80 to 90 basis points in the quarter. So, that kind of is a walk year-over-year from a margin perspective.

And then, again, continue to expect the pricing actions to gain traction in the future quarters to help to offset those inflationary pressures that we've seen..

So, Tim, on the mix, right, we said that our long-term target gross margin is 40%. And the way we were planning on getting there was through hardware innovation and software. And as we've gotten traction with the international team, we think that there is a good growth opportunity there that we are digging into, but we have our first proof point.

I think your question is when RDOF kicks in and the infrastructure fund kicks in, will that drive more growth in the U.S. side? Yes, that is more margin accretive. So, I gave my best estimates on when that funding will hit. And we want to keep our regional mix model the same, two-thirds North America, one-third the rest of the world.

And we will revisit that as that funding starts to flow. But there is no denying that when it does, it'll be margin accretive for us..

Do you have any further question? I am sorry. Go ahead. .

It was really interesting question. Just to stick with RDOF, and so you mentioned, you won awards, I think backed by -- carriers are backed by $3 billion in awards. And historically, I want to ask about you one-time estimated kind of the TAM range for Aviat in the 2% to 4% range, based on that network build cost, or maybe even based on those awards.

As you have more experience with these deals and -- or winning a lot of them, is that still a reasonable range, any bias toward the high end, low end or kind of any update in general on how you see your market opportunity out of those….

Yes. I would say, we're the -- same, right? So, the reason we put the $3 billion number -- and last time was you asked a question that we didn't have last time was, of your winners how much does it represent of opportunity, $3 billion. We would stick with the 2% to 4%, the funding goes to microwave.

And in our investor presentation we think that we have 38% share, and I wouldn't say that any of that's materially changed. So, as you kind of model our potential upside, when the RDOF funding, I would say that the numbers are the same..

Great. And that $3 billion number is pretty much the total amount of awards to fixed wireless carriers.

Is that coincidental or are there any -- is there anything outstanding there, or kind of win them all?.

Let me check if that’s a coincident or fact. I didn't do that totally, but we'll get back to you on that. But it's -- we’ve got to be pretty close to winning them all. .

Yes. Well, I'm just saying your share sounds anecdotally higher than 38, but it really hasn't started to roll yet. And I figured there was limited impact looking at the flat sequential U.S. numbers from RDOF.

As you look at the state level, I don't know if you're seeing any funding or opportunities, not for state networks but coming out of state level funding. And I'd ask you the same question on Dish in terms of it doesn't seem like that started to be material yet.

What's your expected to timing on that?.

Yes. I think, the state funding environment is pretty stable and the positive catalyst is the infrastructure fund. And then, there's one bit of legislation that I don't know that we fully understand what the conversion of the leftover CARES money. That could be a positive catalyst, but we don't know specifically about that.

And then on Dish, it hasn't been material, but we're seeing signs that it will have some positive impact let's say in Q4 of our fiscal year..

Thank you. And our next question will come from Theodore O'Neill with Litchfield Hills Research..

Yes. Congratulations on the quarter. Couple of questions for you.

Could you -- could sales have been higher if you had had supply chain issues in the quarter? And do those -- and if they could have been, do those sort of come later or do they just get taken up and consumed by competitors?.

Well, Theo, I'm pleased to report that we didn't miss any demand due to supply chain issues in the quarter. And if you go back the past couple quarters, we said, we'd miss 1 million or 2 million, but our supply chain team performed well and we didn't miss any demand.

And I think that's the first time -- that's been the case in three or four or maybe more quarters. So, that's another sign that the environment is stabilizing, and I'll keep my fingers crossed, but maybe the supply environment is moderating..

And Pete, on the last quarter, you said that you are now supplying 15 of the top-30 rural digital opportunity fund winners enter in advanced discussions, 5 of the other top-30.

How is that going?.

Yes, I would say, we've gotten one out the five, so we're -- let's go for 16 of the top-30..

And it was noted earlier, but your sales in the Africa and Middle East segment were up 30% sequentially and they've been -- I think, they've been flat for many quarters.

As we sort of model out these, our own projections, should we consider that sort of be stable at this new level or how should we think about that?.

So, we think that -- look, it was an exceptional quarter Q2. And if we want to kind of do that, our North America business was not growing as much and international was growing more. And we would say that, the way to get -- look at our revised revenue guidance and just use the two thirds North America, one third split.

So, I think that's about the color we can give. But I would say on the Africa side, as the 5G prep work is completed, then you could imagine later this calendar year, this having a positive impact. But to hedge back on that a little bit, we still see the two thirds, North America one third, and we want them both to grow. So that's where we're at.

It's a good question..

[Operator Instructions] And our next question will come from Aaron Martin with AIGH Investment Partners. .

Hi guys. Congratulations on the quarter and I appreciate the continued execution on the buyback. Going back to the AR, was that increase there related to the shift in revenue international, anything related to there, or what else do -- it’s been a nice little creep up..

Yes. This quarter was -- it was almost entirely due to international growth, if I look at the regional breakout of our AR. And so that was definitely a driving factor, which we typically have longer payment terms with international customers in addition to the strong growth.

So, those are the two biggest contributing factors that, again, we expect that to start to come back in subsequent quarters..

And then, I think you talked about the backlog flipping over $200 million, was it up sequentially?.

So, we don't break out backlog on a quarterly basis because the project nature. The other thing we would add to give you a little more insight is our book-to-bill ratio remains above 1..

Okay.

And then, as I look at that -- on the higher backlog, is any of that a function of longer lead times and your customers having to order ahead for a little longer, or is that really emblematic true demand?.

So, our private network business is long cycle. So, we don't see very much acceleration of demand in that segment. And we certainly haven't seen the mobile network operator space. So, if that's going on, we’re not aware of it. So, I wouldn't say we have any acceleration of demand. So, it's really true demand..

Got it.

As I think about growth over the next 6, 12, 24 months, what's a more important driving factor? Is it rural broadband? Is it 5G rollouts really happening? What are the bigger factors in terms of whether the growth will show up and how strong it will be for you guys over that time frame?.

Yes. So, we have three drivers that we talk about. Private networks, which is about two-thirds of our business. So, that's really important. And, I think that's going to be a steady grower for us. And when the infrastructure fund kicks in, that should be a growth accelerant. The rural broadband is really -- would be a growth accelerant.

And 5G, we think we're in early innings. We're really happy to see the developments, particularly in Africa, and that’d be a growth accelerant. So, if you look at in terms of the core company, the private networks is most important.

But, in terms of accelerating growth, the 5G and the rural broadband should be pleasant developments for us, say one to two years out..

Got it. And then, you talked about a multiband, customers are very excited about the release. And I think you said it enables a $300 million TAM expansion for you.

Can you talk a little bit about your initial, I guess, test? I don't know if you've taken any orders yet with -- particularly for multiband and any quantification around the initial rollout of that product..

Yes. So, the $300 million TAM expansion was with our high availability routing software. So, the Multiband XD makes our microwave radios more competitive versus fiber. And we think that distance we have -- we have opened up for $50 million more of TAM. So, that would be share gain versus fiber. And we are in trials with two lead customers.

And where these lead customers are is where they're using fiber. And the total cost of all ownership of the fiber increases dramatically with link distances. So, think about mountainous terrains or kind of island-based nations, where there is a lot of water. We think that this improves the value proposition for microwave.

And we're really excited that we have two significant customers that are in trials..

Okay.

And then on the new 10 gig, very long distance radio, where are you with that? Are the customers -- do they care about the additional capabilities and/or catching up, or what can you tell me there in terms of acceptance?.

So, the 10 gig radio and Multiband XD are the same. So, that comment is related to the Multiband XD radio..

Thank you. And that does conclude the question-answer session. I now turn the conference back over to Mr. Pete Smith for any additional or closing remarks..

I'd like to thank everyone for your support and attention and interest in Aviat. Everybody stay safe and healthy. We're looking forward to giving you an update on our progress in 90 days. Thanks everyone..

Thank you. And that does conclude today's conference. We do thank you for your participation. Have an excellent day..