Karl E. Johnsen - Senior Vice President & Chief Financial Officer Antonio J. Pietri - President, Chief Executive Officer & Director.

Matthew C. Pfau - William Blair & Co. LLC David E. Hynes - Canaccord Genuity, Inc. Sterling Auty - JPMorgan Securities LLC Monika Garg - Pacific Crest Securities-KeyBanc Capital Markets, Inc. Mark W. Schappel - The Benchmark Co. LLC Michael Morosi - Avondale Partners LLC.

Good afternoon. My name is Amber and I will be your conference operator today. At this time, I would like to welcome everyone to the Aspen Technology's Third Quarter 2016 Earnings 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. Thank you.

CFO, Karl Johnsen, you may begin your conference..

Thank you. Good afternoon, everyone. Thank you for joining us to review our third quarter fiscal 2016 for the period ending March 31, 2016. I'm Karl Johnsen, CFO of AspenTech, and with me on the call today is Antonio Pietri, President and CEO.

Before we begin, I will make the usual Safe Harbor statement that during the course of this call, we may make projections or other forward-looking statements about the financial performance of the company that involve risks and uncertainties. The company's actual results may differ materially from such projections or statements.

Factors that may cause such differences include but are not limited to those discussed in today's call and those in our Form 10-Q for the third quarter of fiscal year 2016, which is now on file with the SEC. Also, please note that the following information is related to our current business conditions and our outlook as of today, April 28, 2016.

Consistent with our prior practice, we expressly disclaim any obligation to update this information. The structure of today's call will be as follows.

Antonio will discuss business highlights from the quarter and then I'll review the financial results for the third quarter and our guidance for the fourth quarter as well as our updated outlook for fiscal year 2016 before we open up the call for Q&A.

Antonio?.

Thanks, Karl, and thanks to everyone for joining us this afternoon. Let's begin by looking at our summary financial results for the quarter. Total revenue of $119.2 million was above the high-end of our guidance range. Non-GAAP operating income was $59.3 million, which represents a non-GAAP operating margin of 50%.

Non-GAAP EPS was $0.49, which was $0.07 above the high-end of our guidance range and grew 32% on a year-over-year basis due to the combination of our top-line growth, operating margin expansion, and reduction in share count due to the cumulative impact of our share repurchase program.

Free cash flow was $77.2 million and annual spend was $430.6 million, up 5% year-over-year. In addition, today, we announced a $400 million increase in our share repurchase authorization, which is in addition to the $196 million that was remaining as of March 31.

Based on current market conditions and business outlook, it is our intent to repurchase $400 million worth of stock during fiscal 2017. Today's announcement demonstrates the strength and predictability of our cash flow and balance sheet, which we further reinforce during the quarter with a $250 million credit facility.

Since starting our share repurchase program in fiscal 2011, we have bought back 19.9 million shares for $666 million, including 1.4 million shares for $50 million in the third quarter. We remain committed to deploying our substantial financial resources in ways that produce significant value to our shareholders.

Our reported revenue and profitability metrics were both solid and exceeded our expectations for the quarter. At the same time, a sharp drop in oil prices early in the quarter compounded the already challenging macro environment facing some of our customers.

More specifically, our bookings performance in the quarter was negatively impacted by the particularly difficult macro and business environment, impacting some Latin American oil producing companies.

As we have discussed in recent calls, in FY 2016, we have a higher than usual concentration of contract up for renewal in the second quarter, third quarter and fourth quarter with national oil companies, NOCs.

In our Q2 earnings call, we also referred to one of these contracts not renewing in Q2, which had a material impact on annual spend growth for that quarter. Our expectation was that this contract, along with two other large Latin American NOC contracts that were up for renewal in the third quarter would close by the end of March.

We have not yet renewed this contract in Latin America, but we're actively engaged with these customers. These three contracts represent a large portion of our NOC exposure for fiscal 2016.

The remaining NOC contracts that are up for renewal in the fourth quarter are based outside of Latin America and we expect to close them based on our discussions with those companies. We're more optimistic on our ability to close this contract outside of Latin America, because of the more favorable macro and business environment in these countries.

Turning to the E&C and upstream energy verticals, these segments remain challenging. We experienced some additional pressure on annual spend in the form of entitlement reductions or price adjustments that we believe reflected the challenge of the further drop in oil prices, early in the quarter.

In the face of these challenges, it is important to highlight that we did have several positive areas during the quarter. We continue to see positive demand from the downstream segment with international oil company and independent refiner, owner-operator customers delivering a solid performance during the quarter.

Second, chemicals remained a source of strength as we saw good demand from this segment, which represents roughly 25% of our overall business. Third, we experienced a positive growth quarter for our SMB, E&C business.

This is the first time in three quarters, realizing growth in this segment and perhaps an early sign of the beginning of the stabilization process in that vertical. And fourth, we continue to generate best-in-class profitability and free cash flow and are still on pace to exceed the initial non-GAAP EPS guidance we issued at the beginning of FY 2016.

Our business model is highly scalable and we're committed to managing our cost structure, while continuing to make investments to properly position the business for long-term growth. From a guidance perspective, we're widening our range on annual spend growth to 3% to 6% for fiscal 2016 versus our previous outlook of 5% to 6%.

This update is due to the timing associated with certain transactions with existing customers including the potential renewal of the Latin American NOC contracts I referenced earlier as well as some other sizeable transactions with owner-operator customers that are currently in our pipeline.

We would expect to come in toward the lower end of this range if none of these transactions close during the quarter and near the high-end if all of them do. It's not our intent to provide this much context on our focus on a regular basis.

But we thought the additional color would be helpful to investors in light of the unprecedented situation with our NOC customers. Looking at additional details of our third quarter performance, energy, engineering and construction and chemicals, once again represent greater than 90% of our business on a gross growth basis.

Chemicals was the largest vertical contributor, followed by energy and engineering and construction. Looking at our 10 largest transactions in the quarter, there was again a mix of engineering and manufacturing supply chain deals.

I would like to reference a few key deals that closed in the quarter to provide insight on how we continue to generate growth.

First, the refining subsidiary of a national oil company service station expanded its relationship with AspenTech by committing to upgrade our PIMS planning solution to PIMS-AO, which it believes will produce an incremental $5 million annually in benefits.

Second, a refining joint venture in Saudi Arabia that had been considering advanced control solutions for some time, evaluated our DMC3 Adaptive Process Control software.

The evaluation convinced the customer that the work process automation in DMC3 would enable it to successfully capture and maintain the benefits from advanced control, which led to a new token agreement to gain access to DMC3.

Third, a global industrial company expanded its relationship with AspenTech, a year into an existing six-year agreement in order to introduce and expand the usage of AspenTech in many products across multiple business units.

This expanded usage will displace one of our competitor software products as the customer is standardized on our engineering suite.

Fourth, a South Korean engineering company renewed and expanded a six-year agreement to increase the use of our engineering suite into the front-end engineering design area by using our basic engineering and cost estimation products.

And finally, a leading power company in the United States expanded the use of our real-time data management solutions across all of its power generation facilities including nuclear power plants.

By doing so, this power generator gains access to our latest aspenONE process explorer product, which enhances the customers' operational visualization capabilities, one of the new futures in our recent aspenONE 8.8 and 8.8.8.1 product release.

A key focus for AspenTech is to continuously invest in our products to provide greater value to our customers. Specifically, AspenTech has been investing in the development of a new analytic solution that leverages two areas of technical and market strength for the company; models and data capture and visualization.

We're encouraged by the feedback from customers testing the alpha version of the new analytics product.

These customers recognized the potential value creation from combining the predicted power of engineering models with powerful search and pattern recognition algorithms enhanced by leading visualization technology to deliver real-time predictive and prescriptive analytic capabilities in the area of process operations and maintenance.

Our new analytic solution is a initial product in our asset optimization strategy, which leverages our existing strength in asset design and asset operations with asset maintenance to allow our customers even more optimization capability across the entire asset lifecycle.

Our ability to serve as a full planned lifecycle for owner-operator customers will significantly increase the value AspenTech can deliver, while expanding our addressable market opportunity.

During our Investor Day in June, we will provide greater insight into our asset optimization vision and our product strategy, which we're confident, we'll further strengthen AspenTech's ability to deliver future growth as markets improve. A key part of our product strategy is to augment our R&D investments with M&A.

In recent years, we have completed a number of tuck-in acquisitions to expand our capabilities and the value we're delivering to our customers. We expect to continue doing more of this as we look ahead.

In addition, we recently showed our willingness to engage in larger transactions, if there is a compelling fit and we're confident in our ability to execute from an integration perspective. Our decision to no longer pursue KBC highlights that we're disciplined and take our stewardship responsibilities very seriously.

Big or small, we will move forward only if acquisitions make both a strategic and financial sense. We're confident about the assets AspenTech has in place today and moving forward, we will continue to evaluate opportunities that augment our internal development efforts.

In summary, AspenTech continues to generate solid results in the face of a challenging time for many of the industries we serve. We continue to generate positive growth and we're delivering best-in-class profitability and significant cash flow.

In fact, we're on pace to generate a record non-GAAP operating margin and as I noted earlier, exceed our non-GAAP EPS targets established at the beginning of the year.

We remain focused on what we can control to position AspenTech well through this challenging period and to thrive when market conditions improve, supporting our customers extending our product leadership through continued innovation, maintaining a sharp focus on expense, discipline and operational excellence, and leveraging our strong profitability and cash flow to enhance long-term shareholder value.

With that, let me turn the call over to Karl..

GAAP operating income of $193 million to $201 million; net income of $125 million to $131 million; and GAAP EPS of $1.49 to $1.56. From a non-GAAP perspective, we now expect non-GAAP operating income in the range of $226 million to $230 million, which is up from our previous guidance of $215 million to $223 million for full-year fiscal 2016.

This will lead to non-GAAP earnings per share in the range of a $1.80 to a $1.83, which is a meaningful increase from our previous guidance of $1.66 to a $1.72 for the fiscal year. With respect to annual spend, as Antonio mentioned, we are adjusting our guidance to 3% to 6% growth.

Looking at cash flow, we are reiterating our fiscal 2016 guidance of approximately $155 million to $160 million of free cash flow. In summary, our third quarter performance was solid in light of the challenging macro environment facing our customers.

Our highly scalable business model and ongoing expense discipline is enabling us to continue generating substantial profitability and free cash flow that we are leveraging to protect and enhance long-term shareholder value. With that, we are now happy to take your questions. Operator, let's begin Q&A.

Operator, do we have any calls waiting, questions?.

And your first question comes from the line of Matt Pfau at William Blair..

Hey, guys. Thanks for taking my questions. First, wanted to start off on some of the national oil company renewals that you mentioned. So, I guess first of all, my question is what are these companies doing in the meantime, while these contracts are being pushed because I'm assuming that they don't have access. So, I guess one is that correct.

And then two, what are they doing. And then is there any possibility that these contracts are not renewed at all or is it in your view just a factor of time before they get renewed..

Okay, Matt. Thank you for the question. This is Antonio.

And so, first of all, of course, these customers are long-time customers of Aspen Technology and therefore we're working closely with them to make sure that they continue to capture value from the use of our technologies and we have made arrangements so that they maintain access to our software, while we are engaged with them in finalizing the negotiation for these contracts.

There are multiple reasons why these contracts are getting delayed and I'm not going to get into the specifics of why they didn't renew on time and also I'm not going to speculate whether they'll renew it or not, but we're engaged with them and as we said, our guidance, we want to make sure and be conservative and reflect the fact that we've had a difficult time, just closing them according to our expectations.

But we are engaged with those customers..

Got it. And then excluding those customers, is the pressure in renewals in the E&C and upstream portions, is that consistent with what you guys had expected from when you gave guidance on the prior earnings call? And I guess, it would seem so given that guidances with the ex of the annual spend, it hasn't been changed..

Yeah. The fact is that Q3 from a metric standpoint is sort of an anomaly, because the impact of these contracts, these two large NOC contracts that did not renew, skewed their results both from losses and on renewal standpoint. If those contracts had renewed, the performance of the quarter would have been in line with our expectations.

But that was not the case..

Got it. And last one from me.

Does the increased share repurchase program change anything related to your acquisition strategy, in terms of potential size of acquisition or a number that you were going to pursue?.

Well, look our priority continues to be to do M&A. And certainly, even with the announcement of that $400 million share repurchase program for fiscal 2017, we will still do tuck-ins.

In a way the announcement of that program signifies that we don't see anything of significant size in the horizon and that's what we've made the decision to get the approval for the size of the repurchase program and then announce it.

But should anything change, we always like we did with the KBC transaction would change our plans on the repurchase, but at the moment we don't see anything and that's what we have announced it..

Got it. Thanks for taking my questions, guys..

Yeah..

Okay. Your next question comes from the line of David Hynes with Canaccord..

Hey, thanks, guys. Impressive operating margins, again nice work there.

Question on the E&Cs that are challenged, you guys signed multi-year deals with them, I don't know if they're shorter on the E&C side, but typically you guys are signing five-year or six-year deals, so with the assumption that you're only touching kind of 20% of your customer base a year, is it fair to think that kind of head count reductions in this space are going to have a multi-year impact on renewals on that 30% of the business?.

Look, certainly usage in the E&Cs is all about head count, eye balls on the software.

At the same time, your statement assumes that there is not going to be a pickup in spend for multiple years, and I would argue that if there is a pickup in CapEx spend and construction, then the E&Cs will start hiring people again, and therefore, usage of the software will pick up again.

So, this is the strength of our model that during this downturn only a segment of the population of customers coming up for renewal, that gives us time to weather the downturn, and hopefully spend will pick up in the future, and they'll start hiring more people and usage will start picking up again, and we won't be dealing with reductions in spend are nonrenewals..

But don't those customers who have cut heads now have excess capacity to grow into. Like in other words, if they hire a bunch of folks, they already have those entitlements, right. They're not going to have to buy more from you to feed those guys.

Am I thinking about it at the right way?.

Yeah. No, you're right..

Okay..

(31:46).

Got it. And then, second obviously, we've seen a pretty sharp recovery here in the price of oil in the last month. I guess, has there been notable change in – I assume sentiment has improved.

How about appetite for investment from the customers that you're currently dealing with recovery in oil prices?.

What we really focus on is on budgets. I think calendar 2016 is about the budgets that were set late last year for calendar 2016 and many adjustments have taken place since then.

Just because oil price is recovering, I don't want to try to read how our customers will behave, but I would imagine that you have to see oil consistently at a certain level for that confidence to come back into the market and customers to really increase their spend.

So, like, I think this is only a month of higher oil prices, time will tell what that means..

Yeah. And then may be one for Karl, if I can. Karl, help me understand the relationship between kind of the growth we see in annual spend and then what's happening in deferred revenue.

I would think over an extended period of time, growth in deferred revenue would kind of closely approximate growth in annual spend now that we've lapped the model transition and all that sort of stuff is in the past.

Why is that not the case or should it be at some point in the future?.

Yeah. So, deferred revenue will – it will have a relationship with annual spend; they are slightly correlated. What you're seeing now is sort of like three things kind of going on that's kind of making that unclear. First is, we're kind of getting through the transition.

So, looking at 2016 and 2017 will be a little bit clear than looking at 2016 and 2015. We have about $9 million, $10 million of deferred revenue that was on the balance sheet a year ago.

That was sort of what we've talked about before which was recognized, it wasn't recognized in a ratable way, so it kind of came in some of those numbers that we talk about and the quarters that came in on a non-recurring basis. So that came off and it's not replaced.

And then you're seeing the phenomenon of the professional services isn't getting hung up on the balance sheet like it used to be historically when it was sold with licenses. So you take those into account, reset what a year ago looked like, and you have some pretty healthy growth.

But when you really trying to judge it, I would still kind of point you back to the annual spend metric..

Okay. And then last one if I may. Antonio, at this time last year, you gave a view on what you thought fiscal 2016 was going to look like, I'm curious if you have any high level thoughts on what fiscal 2017 is going to look like.

I know that's a long way out and it's a shaky macroenvironment, but that's the question that I get asked most often, so I figured I'd pass it on to you?.

Yes. Well, great. Thank you. Well, look, clearly as we all know, we've had to lower our guidance for fiscal 2016. I think visibility in this environment has been a big challenge and I would state that I think the visibility is really no more than three months out.

Hopefully, as oil prices stabilize or continue to slowly increase, visibility will get better. But we'll talk about 2017 during our Investor Day coming up in June, and of course we'll be prepared to talk about 2017 and what we think about that fiscal year..

Understood. Okay. Thanks for the color guys..

Yes..

Your next question comes from the line of Sterling Auty with JPMorgan..

Yes. Thanks. Hi, guys..

Hello. Hey..

I'm wondering with the June guidance, you mentioned your expectations for those renewals and the impact on annual customer spend of 3% to 6%.

But what did you factor in, in terms of those renewals, both the contracts that have not renewed yet as well as the ones that are coming up for renewal?.

Well, those are baked into the guidance, because we talked about a non-renewal rate, about rate of losses in the past, that's baked into guidance. Of course, the non-renewal of now three large NOC contracts in Latin America, these are losses in a way for us to deliver the growth that we have delivered.

We've had to mitigate through growth, and I just want to emphasize that despite flat growth in Q3, the company had to generate enough gross growth to mitigate the impact from the significant losses in that non-renewal of the Latin American contract.

So we're still generating a lot of new growth in our customer base, it's just that we're having to deal with these non-renewals. The guidance that we've established at the low end of the range, 3%, says that we don't renew in time many of these contract that already are being renewed.

And on the high-end says that we'll renew them all and some more, because we do have a pipeline of business in Q4 that has nothing to do with NOCs. There are some sizable transactions as we stated in my script just now that we're also hoping to close. So that's all baked into the guidance..

So the $111 million revenue for the low end for June assumes that the couple that have not renewed that have slipped, continue to slip?.

Yes. So when you're thinking about the revenue in Q4, that's not going to be impacted by the annual spend in Q4. So when you close annual spend in a quarter, you get little to no impact to revenue in that quarter..

Okay. And then, Antonio, you mentioned outside of the national oil companies and outside of Latin America, you mentioned growth in the customer base.

Can you give us a sense for the customers that are renewing outside of that environment, what kind of increase are you seeing on their annual run rate? Are they up 5%, 6%, or are they also challenged and below that number?.

Look, it's all over the place. We have customers that are buying a lot more and growth about 10%, 15%. There are some customers that buy barely enough for growth. There are others in that 5% range, it's a complete mix. But look we have some healthy segments.

Chemicals, we're seeing good demand in chemicals and you can expect that that's where we're seeing some healthy growth. Independent refiners is also an area where business is good, is solid. International oil companies, the larger oil companies, the Shell, the BPs, the Totals.

It is NOCs that are tied to – I should say, this way, NOC that provide a significant portion of the fiscal revenue for a country where you see some challenges, but we're working through that..

All right. Great. Thank you..

Your next question comes from the line of Monika Garg..

Hi, thanks for taking my question.

First on the NOC side, Antonio, could you maybe talk about that, you're not seeing any kind of competition or anything in those deals and it is just given the macro-environment in these countries that these are getting delayed?.

No, we're seeing competition. Certainly in this sort of environment, you would expect everyone to be operating at a higher gear from a competitive standpoint. I would think aloud a specific region in the world where we saw some pretty odd behavior from one of our competitors.

Interesting enough a couple of weeks later we also find out that that competitor was closing down their software operations that compete with us in that regions and moving most of them to a country in Asia.

So it's signal to us that there was a little bit of desperation in some of the moves that we're seeing from that competitor, but no, of course, there is more competition, there is less business out there, and therefore everyone has to compete harder..

Got it. Then on the SMB side, the comment was encouraging, some stabilization what you're seeing.

Could you maybe provide more details on it?.

Well, look, we had a positive growth. It wasn't a barn burner, but it was positive. It's only one data point, but it was a first positive growth out of SMB E&C group in a few quarters.

I'd like to see two or three or four data points of growth before we claim victory or that we're out of this, but it's only one quarter, and we'll see what happens this quarter and in the next couple..

Given the oil has recently recovered, depending upon your discussions with your end-customers, how long do you think we need to see some stabilization in oil prices like three months, six months before we can see some pickup activity in the E&C segment?.

Well, Monika, the way we think about it and I think about it is, everyone is forecasting that oil will be a $45, $50 by the end of the year. It's already there somewhat.

I think it's about the budgeting process at the end of this calendar year, September, October or November when all these companies are then looking at their budgets for calendar of 2017. And then those budgets then set a spend for calendar of 2017.

If oil is at a level and it's been sustained at a level that gives confidence to people that they can spend against a higher oil price number, then we'll probably see a more positive spend environment in 2017. I think in 2016, I assume everyone is very cautious and regardless of what happens to oil, people will continue to be cautious..

Thank you so much..

In 2016, yes. Thank you..

Your next question comes from the line of Mark Schappel with Benchmark..

Hi. Thanks for taking my question....

Hi, Mark..

...and, guys, nice job on the margin front.

So, Antonio, regarding the outstanding NOC contract renewals, is it fair to assume that these contracts fall into your downstream owner-operator bucket rather than your upstream bucket?.

Well, look these are integrated oil companies, so yes, you can assume a lot of the software is used downstream, but at the same time, they are integrated oil companies and some of that usage might be upstream as well. But the organizations that we deal with tend to be downstream..

Okay, great.

And, Antonio, did I hear you correctly that the outstanding contracts there's actually three of them, the large contracts?.

Yes. Three of them have not renewed. We have two this quarter that we're more confident that they will renew outside of Latin America..

And the three with less confidence are in Latin America?.

Correct..

Okay. Great.

And then, Karl, with respect to the fourth quarter revenue guidance, do you expect any non-recurring revenue in that number?.

No..

Great. Thanks. That's all from me..

Thank you..

And your last question comes from the line of Michael Morosi with Avondale Partners..

Hi, Michael..

Hi, guys. Thanks for taking the question..

Yes..

So looking at the raised operating profit guidance but the unchanged free cash flow guidance, maybe, Karl, I wondered if you could just talk a little bit about that and how we should expect free cash flow to track operating profit over time?.

Sure. So a big piece of the reduction of the expense is in Q4, so that naturally would have hit my free cash flow more in the subsequent year, but in general, it trails at a little bit. The metric I use to kind of track against free cash flow is the EBITDA and that's somewhere in that low to middle 70% range..

Okay. That's helpful.

And then, Antonio, just kind of looking across cycles, what precedent is there for annual spend to go flat or negative and you might have to go back a number of years to look at that example, but just in terms of the overall demand environment, has that happened before and what does either renewals or just customer behavior look like in that type of environment?.

Michael, so I'll talk about the years that I've been involved with executive team in AspenTech, because before that I had no visibility into ins and outs of the financials of the company. But look back to 2007, really the 2008 or 2009 period was a difficult period because of the global recession.

The company at the time didn't report annual spend and we were tracking revenue in a different way, because we were recognizing revenue on an upfront basis and there was a lot of perpetual licenses there as well.

But bookings, which is a number that I was dealing with in-charge of the sales organization, our bookings number has slowed down to sort of the mid-single digits, a little bit of what we're seeing right now with annual spend. That is one data point that I can give you.

After 2009 in a way the macro-environment was very positive around the oil as we all know, and it's only in the last 18 months where we've been facing this headwinds..

Okay. And then so in light of that, where do you feel like there are the most opportunities to manage cash flow and manage earnings from an OpEx standpoint.

What do you view as the right level of ongoing spend to support the current business?.

You're seeing our expenses continuously fall within a range. I think we've been plus or minus $5 million around $260 million over the last few years. That's not sustainable, but at the same we're being very careful at this time with our expenditures, because we're facing a slower growth.

What I would say, though, is that I think AspenTech is uniquely positioned to really put the foot to the pedal in an environment like this one to create more distance between ourselves and competitor by investing more in R&D, marketing and other areas in a judicious manner. We're not going to go crazy here.

We've demonstrated we're very judicious in our behavior.

But at the same time I think this is an opportunity and part of my talk in the script around our investments in analytics and other things reflect that that we believe we can continue to create a distance between ourselves and the competition in this environment, because we're standalone software company. We have the margins that we have.

Most of our competitors are tied to bigger businesses that don't have the margins that we have and they're being managed in a different way than we manage Aspen Technology..

And then just finally, looking at the pace of buybacks over the next few quarters, relative to cash flow generation and existing cash on the balance sheet. It seems like there might be an indication that the company would be willing now to take on a little more leverage.

What are the longer term leverage metrics in terms of where you guys are comfortable operating the business?.

Yes, I'll let Karl answer that question..

Sure. So when we think of leverage right now, we're thinking about like a 0.5 turn to two turns is probably like a comfortable level. But when we put that on, we want to make sure that it's thoughtful is the reason we're putting it on.

The right opportunity, wherever that opportunity investment might be, we could take that up to three turns and be very comfortable. That's probably the higher end of the range right now..

All right. Very good. Thanks a lot for taking the questions, guys..

Thank you, Mike..

Well, I'd like to thank everyone for joining the call. We look forward to talking to you on callbacks and one-on-ones when we attend some of the investor conferences that we're going to be attending in the next couple of months. Thank you, everyone..

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