Good day and welcome to the CEVA, Inc. Fourth Quarter and Full Year 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask questions. [Operator Instructions] Please note today’s event is being recorded.

I would now like to turn the conference over to Richard Kingston, Vice President of Market Intelligence and Investor and Public Relations. Please go ahead sir..

Thank you, Rocco. Good morning, everyone, and welcome to CEVA’s Fourth Quarter and Full Year 2019’s Earnings Conference Call. I am joined today by Gideon Wertheizer, Chief Executive Officer; and Yaniv Arieli, Chief Financial Officer of CEVA.

Gideon will cover the business aspects and highlights from the fourth quarter and full year 2019 and provide general qualitative data. Yaniv will then cover the financial results for the fourth quarter and full year 2019 and also provide qualitative data for the first quarter and full year 2020. I will start with the forward-looking statements.

Please note that today’s discussion contains forward-looking statements that involve risks and uncertainties as well as assumptions that if they materialize or prove incorrect, could cause the results of CEVA to differ materially from those expressed or implied by such forward-looking statements and assumptions.

Forward-looking statements include our assessment of the overall licensing market in the first quarter of 2020; our annual 2020 and first quarter 2020 guidance; our anticipated pillars of growth and optimism about achieving such growth objectives; reaffirmation of our 2022 royalty goals; higher R&D expenses in 2020 and market data by Dell'Oro.

For information on the factors that could cause a difference in our results, please refer to our filings with the Securities and Exchange Commission.

These include, the ability of CEVA’s IP for smarter, connected devices to continue to be strong growth drivers for us; our success in penetrating new markets and maintaining our market position in existing markets; the ability of new products incorporating our technologies to achieve market acceptance; the speed and extent of the expansion of the 5G Wi-Fi contextual awareness and IoT markets; our ability to execute more non-handset baseband license agreements; the effect of trade tariffs and political tensions; the effect of intense industry competition and consolidation; and global chip market trends.

CEVA assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates. With that said, I will now hand the call over to Gideon..

Efficiently utilize R&D expenditure for new technology development and working closely with customers to expedite product developments. We are choosing our R&D investments prudently and be agile and responsive to lucrative and strategic opportunities.

For this year, due to the step up in licensing revenue and customer engagements, including engagements with a top-tier handset player, we plan to increase our R&D expenditure by approximately $6.7 million non-GAAP versus last year, which will also include a full year of R&D expenditure for our Hillcrest Labs team.

So in summary, I am very pleased with our achievements in 2019. We were determined and consistent with customer engagements and innovative with our product developments, which resulted in an exceptional growth year in our annual licensing revenue, ahead of the target we set at our first Analyst Day in January 2019.

We are on a solid path for this momentum to continue into 2020. This strong licensing performance and the strategic engagements we have formed with top-tier companies set the foundation for our royalty growth toward our targets in 2022.

We will continue to come up with differentiated solutions with an unmatched level of integration like our SenslinQ contextual awareness platform or CDNN Invite that expand our footprint in AI.

Finally, I would like to take this opportunity to thank all of our employees for their hard work, innovation and fantastic execution, which has made us a top industry name for connectivity and smart sensing technologies for the IoT industry.

I would like also to extend my thanks to our partners, suppliers and last, but not least our investors for their support. We wish you all a happy and prosperous year. With that said, I’ll now turn the call over to Yaniv, who will outline the financials and the guidance..

Licensing and related revenue was approximately $14.8 million, reflecting 52% of total revenues, 40% higher as compared to the fourth quarter of 2018 and up 31% sequentially. Royalty revenue was $13.5 million, reflecting 48% of total revenues, up 24% from $10.9 million for the same quarter last year and up 11% sequentially.

Non-handset baseband royalty revenue reached an all-time record high of $4.3 million in the quarter. Quarterly gross margin was 90% on GAAP basis and 91% on non-GAAP basis.

Total operating expenses for the fourth quarter were $22.0 million, $1 million above the high end of our guidance, mainly due to accrued compensation-related benefit and commission expenses associated with higher 2019 revenues and some provisions for doubtful debt.

OpEx also included an aggregate equity-based compensation expense of approximately $2.7 million, amortization of acquired intangibles associated with the acquisition of the Hillcrest Labs and Immervision business of $0.7 million. We concluded during the quarter the amortization of the acquired intangibles of RivieraWaves in which we invested in 2014.

Total operating expenses for the fourth quarter, excluding these items were $18.6 million, also above the high-end of our guidance due to the same reasons I just highlighted. U.S. GAAP net income for the quarter was $3.1 million and diluted earnings per share were $0.14, compared to net income of $2.3 million and $0.10 for the fourth quarter of 2018.

Non-GAAP net income and diluted EPS for the fourth quarter came up significantly 29% and 30% to $6.8 million and $0.30 respectively, from net income and EPS for the fourth quarter of 2018 of $5.2 million and $0.23 respectively. Other related data.

Shipped units by CEVA licensees during the fourth quarter of 2019 were a record 360 million units, up 23% sequentially and up 45% from the fourth quarter of 2018 reported shipments.

Of the 360 million units shipped, 196 million just shy of 200 or 54% were for handsets baseband chips, reflecting a sequential increase of 16% from 169 million handset baseband shipped during the third quarter of 2019 and a 45% increase from 134 million units shipped a year ago.

Our non-handset baseband shipments reached a new all-time record high of 164 million units, up 33% sequentially and 44% on a year-over-year basis. As for the year, our total shipments increased 12% year-over-year to over 1 billion units, up 5% from 2018 which equivalents to approximately 33 CEVA-powered devices sold every second in 2019.

Annual shipments of handsets increased by 3% year-over-year due to a strong second half with units up 21% year-over-year for that period. Non-handsets baseband royalty revenue continued to grow and reached an all-time record of $13 million, up from $8.7 million in 2018 and $8.1 million in 2017.

In terms of units, non-handset baseband units, shipments were up 25% year-over-year to a record 469 million units. As for the balance sheet items. As of December 31, 2019, CEVA’s cash and cash equivalent balances, marketable securities and bank deposits were $150 million.

We continued our active buyback plan, repurchasing approximately 161,000 shares during the quarter for approximately $4.3 million. Overall, in 2019, we repurchased approximately 355,000 shares for about $9.1 million and fully utilized the shares authorized by our repurchase plan from May 2018.

Earlier this week, our Board of Directors approved a new expansion to the buyback plan by a total of 700,000 shares of common stock available for repurchase. Last, our adjusted to ASC 606 DSOs for the fourth quarter continues to be low at 36 days.

During the fourth quarter, we generated $8.3 million of net cash from operation; depreciation and amortizations were $1.8 million and purchase of fixed assets were $0.8 million. At the end of the year, our headcount was 382 people, of which, 313 were engineers, up from a total of 341 people at the end of 2018. Now for the guidance.

As Gideon described, our strong and broad IP portfolio highly correlates with the needs of semiconductor companies and OEMs looking to expand into IoT and 5G. In 2019, we set a new record high in licensing of approximately $48 million, two years ahead of the target we set at our Analyst Day in January a year ago.

While licensing revenue tends to be lumpy, we believe this momentum continues into 2020 and we expect another step up of licensing revenue in the range of $2 million to $4 million. On royalties, we are expecting annual royalty growth in the range of 10% to 14% to approximately $44 million for the full year.

Our projections take into consideration the lower share at a flagship smartphone OEM. However, the lower share will be more than sufficiently offset by new production ramps and growing shipments from non-handset baseband products, including our Hillcrest Labs sensor fusion business.

With regard to the recent Coronavirus outbreak, we are closely monitoring developments with our royalty customers in China who may be temporarily affected. Our annual guidance assumes a return to normal business and catching up on the yearly basis of this disruption that may take place in the first quarter.

On licensing, we do not see any issues, and are experiencing a healthy and solid licensing environment in the first quarter of the year.

On cost of goods, we expect higher non-GAAP expenses of approximately $1.4 million due to a full year of Hillcrest Labs on board and R&D customization work related expenses for two known projects that will be allocated from R&D to cost of goods.

On OPEX, with our strong licensing execution in 2019 and even stronger expectations for 2020, we will continue to support these new customers and reinforce our leadership with disciplined investments in R&D. Hillcrest Labs will also contribute its share to the 2020 OpEx on a full year basis.

Overall, our non-GAAP OpEx increase will be approximately $7.1 million. Equity-based compensation expenses are forecasted to be about $1 million higher than 2019 and just shy of $12 million. Annual gross margins are forecasted to be in the region of 88% to 90%. Interest income is forecasted to be slightly lower than 2019, at $0.75 million per quarter.

Taxes are expected to be approximately $1 million on a GAAP basis and 15% of pre-tax income on non-GAAP basis and share count for 2020 is expected to be in the range of 23 million to 23.5 million shares.

Specifically, for the first quarter of 2020, gross margin is expected to be approximately 88% on a GAAP basis and 89% on non-GAAP basis, excluding an aggregated $0.2 million of equity-based compensation expenses and $0.1 million of amortizations of other assets associated with the Immervision investment.

OpEx for the first and second quarter of 2020 should be quite flat and higher than the third quarter, due to the timing of R&D grant payments and is expected to be in the range of $21.4 million to $22.4 million.

As our anticipated total operating expenses for the first quarter, $2.6 million is anticipated to be attributable to equity-based compensation and $0.7 million to the amortization of acquired intangibles. Non-GAAP OpEx is expected to be in the range of $18.1 million to $19.1 million also quite similar to the second and fourth quarters of the year.

Net income - interest income is expected to be approximately $0.75 million for the quarter. Taxes for the first quarter is $0.2 million both on GAAP and non GAAP basis and share count for the first quarter is approximately 23 million shares. Rocco, with that, you could open the Q&A session. Thank you. .

[Operator Instructions] And today’s first question comes from Mike Walkley of Canaccord Genuity. Please go ahead. .

Hi, this is Anthony on for Mike. Thanks for taking the question and congrats on the strong results and the new deals signed.

With the 21 new deals including the large strategic agreement with the handset OEM, any color you can provide on, especially on the size of the large license agreement? And then, any sense for how we should think about the timing of these new deals ramping this year and towards your royalty outlook for 2022?.

Sure, so we don’t break down the size of the deals. In our business, we have two flavors of licensing deals this could be for single used, we call it, one use on a chip for a specific product and a specific market and a multi-use which covers the same type of technologies, but for a wider use. These wider, bigger deals usually are term-based.

So it could be three to five years and then we have no limitation of the number of views that you are allowed to use our technology.

In a single use, the customer comes back every six months to a year or year-and-a-half, and he wants to design his next chip these deals tend to be smaller in size and bigger deals are the time-based which are in the millions of dollars per deal.

We have a combination, every year we have few of these larger deals or sometimes we have renewals that could be one, two, three type deals like that a year. It depends. So, for sure, we will have – we had one larger deal in this quarter and then many other – half of the deals are newcomers they even see them for the first time ever.

So, I didn’t answer your question specifically on that specific customer of course, but overall, we had larger deals and smaller deals in the quarter. On the royalty front, what’s interesting is that, we have expanded our business model. If you remember, we talked about Hillcrest Labs having a different flavor of royalties and deals to CEVA.

We signed three deals for the first time using our sensor fusion technology. These deals tend to have less or no upfront license fee, but because we are dealing with OEMs and not chip vendors, their chips deal that we closed in October is now already in production in the beginning of this year.

So within few months, up years, we could see revenue coming from royalties in a very, very quick ROI for this type of technology. So that also helps us with our guidance for growth in 2020 royalty basis. .

Got it. Great. Thank you. And then, with Nokia showing some progress on its ReefShark execution and you, I believe mentioning working closer with them on the development.

How has that changed if anything your expectations or on the clarity of the timing of how they will ramp this year and into 2021?.

So we leave it to them. I mean, we are following them. As you are probably - and as soon as they have the silicon part of their business set up and in mass production, we should be enjoying that. We have another customer ZTE that is using us and is in production with 4G ramping up now to 5G solution.

And we are waiting for another one to be more – hopefully more aggressive this year probably towards the later part as much as we know. But we also get our interest from - publicly from their announcements and follow their development. They have a lot of very interesting design wins and then we are waiting to see the royalty reports come in..

Got it. Great. Thanks again. .

Thank you. .

And our next question today comes from Tavy Rosner of Barclays. Please go ahead. .

Hi. This is Peter Zdebski on for Tavy. Congratulations on the quarter. I just wanted to ask about Hillcrest and Immervision taking those two together.

Are royalties in the back half of the year is still tracking at what you had previously expected? And then, has there been any licensing contribution from those two businesses? And then, also as a follow-up, if you can maybe provide an update on some of the traction you had last quarter in the automotive space?.

Okay. Hi, it’s Gideon. Let me take first of all the sensor fusion, the Hillcrest Lab contribution. Yaniv just answered before. There is a distinction between the Hillcrest business which is OEM-centric, meaning addressing to the end-customer and the CEVA – other businesses which is hardware that goes to semiconductors.

So the impact – usual impact of the sensor fusion business is in the royalty and less on the licensing. So when we said the license agreements in the first quarter that’s very good news for the royalties. And in terms of royalties, the sensor fusion business tracking according to our expectation and to some extent a bit better.

This growth of filter club gives us a very good access to companies in the robot vacuum cleaner which is a very fast-growing market. In PC, in BTV remote and many other segments that we were not exposed with our DSP/Other platform connectivity platform. So, the integration, the sales force growing smoothly and we are happy, very happy.

We mentioned Immervision is an investment that we made in very small companies. We are engaging with customers but these are early days in this front.

Now, you had another question which I forgot if you can remind me?.

It was just on the traction that you saw last quarter in the automotive space. So, obviously, if you could give us an update on that industry. .

Yes. I am very happy of our traction in automotive space. And certainly that it came faster than I anticipated because this is, as you know, very entry to barrier market and with lot of conservatism.

But we are engaged with very large OEM, in automotive, we think of AI technology and last quarter we talked about one of the largest semiconductor player there that also adopted our AI technology. Usually, these deals are extremely comprehensive and different clock speeds than consumer.

I – if I try to understand your question, I think that by 2020 to 2023, we will have our product in calls. .

Okay. Thank you for the color. .

And our next question ….

Sorry. Thank you. .

Our next question comes from Matt Ramsay of Cowen. Please go ahead. .

Thank you very much. Good morning guys. I guess a lot of different questions around the guidance. But I think long-term, Gideon, I was interested that you called out Wi-Fi 6 as sort of one of the big pillars of longer term growth for the company.

I am sure you guys saw that recently, the guys at Broadcom sort of deemed their smartphone Wi-Fi business as non-core to the company and it’s interesting that that’s a place where it seems like you guys are leaning in.

Gideon, if you could step back and talk about your Wi-Fi business and particularly, Wi-Fi 6, the traction of licensing, the breadth of it? Who potentially the partners are and give a little bit of update as to how big of the piece of the royalty growth over the next three or four years that could potentially be? Thank you. .

Yes. Wi-Fi 6 is now a new cycle from Wi-Fi 5 which is to become 802.11ac. So our focus, since you mentioned Broadcom has not deemed the smartphone, I think in the smartphone it’s pretty consolidated the discussions.

We do have person asking us about it but our place in the IoT and IoT it’s a big collection and I mentioned in my prepared remarks, the smart homes. So, all those smart speakers that itself it’s more than 100 million units so far and growing fast.

On smart TV, going to adopt because there is a pure plan going although the top and things that are going into the kitchen appliances, we are seeing also people are taking our Wi-Fi 6 and notifying it lower later. Once they were notifying for low latency for AR. So, we see also the AR angle which, in my opinion, will be big coming with our Wi-Fi 6.

We have now six deals. The fifth customer that are working in those markets. Our pipeline is still with customers that want stability and we in the Wi-Fi 6 has different product lines.

We have for the very low bit rate, the low-end side of it and up to access points where you start speaking about residential gateway, enterprise gateway with 8 by 8 and stuff like this. So, that’s a billion units opportunity for us. .

Got it. Thanks for the color there. Understood on the IoT focus. As my follow-up, I wanted to ask, I mean, obviously there is fluid and unfortunate situation with the Coronavirus. Near term, I think, we are all trying to sort of understand impact to companies.

But I noticed in your fourth quarter results, the non-smartphone business for royalty units was up significantly. I know there has been some sits and starts over the last two or three years with Spreadtrum and Shinhwa gaining and losing share and on their roadmap.

If you guys could just give us an update as to the 3G and 4G non-smartphone business in China royalty opportunity in the near-term and what drove that big upside in the fourth quarter? And is it’s something that’s sustainable? And how should we think about that in the context of the Coronavirus situation? Thanks guys. .

So, when it comes to cellular, let’s say, in devices, we don’t make officially distinction between machine-to-machine let’s call it and handsets.

We mentioned Spreadtrum or Unisoc doesn’t play and received a progress and we believe that they will make a progress - continue to make a progress, they love to keep customer but there are other many ODMs in China targeting India and other areas. And we see the volume up.

So, what – if you are asking what we expect in this year about in the handset space, the produce will be substantial and I would say, growing and it will be for the coming year. And in 5G, we will get our shot there. Certainly advancing in this respect and we find it now in 5G that will materialize sometime. So we will be in 5G, as well.

To give you more color, in Q4, this will maybe three viruses, this is one of the strongest season or quarters we have, both in handsets and in the consumer spares. So, this is coming with on a very strong sensor fusion. This was coming from very strong vision, Bluetooth, AI royalties. So, really – it’s a strong quarter for us.

I mean, all the different markets worked out well for us in Q4. I still don’t think that is associated with the virus, Q1 many companies including us will probably see both the typical seasonality of post Christmas, post Chinese New Year and with the virus kicking in. So, the people are working from home and not in full utilization.

So that’s where you see more. With that said, our licensing because it's not coming only from China, we are still looking very healthy on a worldwide basis. .

Got it. Thanks very much guys. .

Thank you, Matt. .

And our next question today comes from Suji DeSilva of ROTH Capital. Please go ahead. .

Hi, Gideon. How are you? Congratulations on the strong results here and the tier-1 as well, yes, baseband.

In that – along those lines, the smartphones, the remaining tier-1 OEMs, what’s the trend here in terms of their own baseband versus the merchant? And when a guy like the one you just won ramps up their own baseband? What kind of in-house versus merchant baseband share we’d expect.

Half, half or is there a different strategy and dynamic playing here?.

In terms of the merchants those with in-house, it helps them all, but we speak with companies, the big ones, essentially and they see what other people are doing and how they benefit from there and the reason the – all won to both. With that said, it’s a complex stuff and you need to do substantial investments.

But it does give you the advantages of controlling especially when it comes to 5G that you can come out with all sort of different flavors. .

Okay. So more control to the pipeline. Okay.

And then, for the royalty guidance more generally, in 2020 the growth guidance you have one of the drivers of visibility, how much of this yield cost layering on versus other segments? And what kind of mix of baseband and non-baseband would you expect exiting 2020? Just to understand how the two ramp?.

Yes, so, on the handset side, we have seen over the last couple of years, there are many moving parts, hard to control. Sometimes OEMs change vendors along the way. Sometimes, different segments, the high-end, low-end is the key driver of the industry. And overall the replacement cycle is a bit longer and the market is more mature in handsets.

So we are not with one of the bigger OEMs changing vendors in 5G. We are not accounting for growth in our handset baseband for this year. It may go up in few years from different aspects, but for 2020, that’s where we see in the last couple of years, is a gradual decline, but control of that market.

The positive side which we have seen over the last couple of years started off from 2016, I believe, 2017 when our first non-handset baseband became a more significant. We started at the time with 10%, $4 million I recall and went up to $8 million and doubled it in this year, another 50% goes to $13 million.

I envision us exiting 2020 with north of $20 million coming from non-handset baseband. So this is one of the key drivers we talked about a year ago at our Analyst Day this is our – they way that doubled in 2018, growth level that Gideon mentioned in our prepared remarks and it is coming from a lot of these – the newer markets.

Bear in mind, and we were asked about it later that we still don’t have all the customers, not in the base station reporting plus royalties, not in Bluetooth 20 years that we signed this last year. These guys need to get into production. And Hillcrest is just for the first time contributing to royalties for a full year and not only for 5.5 months.

And we are seeing more and more progress faster than – Gideon said, faster than we anticipated coming from that portion. So all these are the positive aspects of it. The royalty is growing at 10% to 14% for this year and there are more drivers to come. But we don’t have exactly the timing in the magnitude of all these other deals. .

Very helpful color. Thank you, guys. .

Thanks, Suji. .

Our next question comes from David O’Connor at Exane BNP Paribas. Please go ahead. .

Hey. Good morning, gents. Thanks for taking my question. Maybe firstly just a follow-up on the last question and what’s the expectation for the kind of the royalty raising H1 versus H2 in 2020? That’s my first question. I have a follow-up to that..

Yes, good question. Thanks for asking. I don’t think we gave too much color about that yet. But if you look at the last two years at CEVA, we had a relatively low first half seasonal-wise both on the handset side and on the consumer, that’s up typical the second half is stronger.

This year, for the first time, although we had the Coronavirus hitting strong in Q1, nobody yet know the effects in the second quarter. With that said, we believe that we will have a positive year-over-year comparison in top-line, in royalties and in licensing by the way, as well, and bottom-line as well.

So we are starting the year with a positive momentum with some concerns, macro concerns mainly around the virus. In the second half of the year, we will see what new products like we saw in this second half session. In the fourth quarter, what other customers get into production, in what magnitude, a little bit more moving pieces.

And overall, still growth both on licensing and royalties for the year. .

David let me just add, this is Gideon. Last year we came out with 5% year-over-year growth in royalties.

This year we forecast 10% to 14% year-over-year growth, more than double than it was last year and this is still results, not all the filling those hirings like Yaniv mentioned, base stations, 5G base stations and all those built to design last year and they still need to gradually get into production.

So, what we like about 2020, our focus is there is this diversification and more resiliency to a specific customer or specific segment. .

Great. That’s helpful. Thank you. And then maybe as my follow-up, you mentioned in your release some licenses are based on processing for 5G base station. I am just wondering, is this is one of your distinct base station customers renewing their license or are taking some different IP. If you could give some detail on that should be very helpful.

Thanks guys..

David, say that again. .

Is it licensing or….

David, your voice was not that good and we couldn’t….

Licensing a base station, is that’s the question?.

Yes, the question was around, you mentioned in the release, 5G base station, one of the licenses there. I am just wondering if that’s the existing base station customers renewing maybe their existing licenses or just if you can give some color around that? Thanks. .

Now the base station customer, you mean?.

Yes. .

Okay. So, we are seeing – as we say, two very active customers. One of them is already production in MT and this is a China-based. The other one is from Europe. Maybe open about the status and we are not following what they are saying.

We do have other base station customers that are - I would consider them Tier-2 and they are progressing in their markets. But the two main customers are totally can go up to 30% of the market. .

Specifically about the deal that you mentioned – that you are asking about, Q4 was a new customer. Maybe a second tier, as Gideon said, but a new customer that has never worked with CEVA and with any of its technologies ever. .

Got it. That’s very helpful. Thanks guys. .

Thank you. .

And our next question comes from Gus Richard at Northland. Please go ahead. .

Yes. Congratulations on the quarter and the outlook and thank you for taking my questions.

Is there a geographic breakdown to the licensing in the current quarter?.

Yes, we usually give it. Let me see. For us really for a second and – yes, here we have, ten deals were in China, five in the U.S., very strong quarter for our U.S. team, two in Europe, four in APAC, including Japan. It’s a pretty nice spread over all over the world. .

Got it. And then, in terms of the strategic deal with the large handset OEM, when would you expect that to result in royalty.

Is that a 2021 or 2022? Do you have any sense as to how long that would take to get into production?.

I wish I could buy the crystal ball on this one. We are seeing different examples that sometimes things take longer than you anticipate. It’s a complex technology in a complex market, I would probably say few years, hopefully not five, but probably three years is very reasonable. .

Got it. And then, all right. That’s very helpful Thank you. .

If we could do anything to expedite, this was part of the R&D investment that we are continuing to invest over the years and we are trying to help our customers do it faster, but it’s never that simple in some of these bit more difficult markets. .

Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to Richard Kingston for any final remarks..

Thank you, Rocco. And thank you all for joining us today and for your continued interest in and support of CEVA. As a reminder, the prepared remarks for this conference call are filed as an exhibit to the current report on Form 8-K and accessible through the Investor section of our website.

With regards to upcoming events we will be attending, these include the Susquehanna Technology Conference on March 12 in New York, and the ROTH Annual Conference, March 15 through 17 in Orange County, California. Please visit the Investor section of our website for further information on these events and other events we will be attending.

Thank you and goodbye..

Thank you, sir. Today’s conference has now concluded. We thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day..