Stephen Vather - ManTech International Corp. Kevin M. Phillips - ManTech International Corp. Judith L. Bjornaas - ManTech International Corp. Daniel J. Keefe - ManTech International Corp. Richard J. Wagner - ManTech International Corp..

Robert M. Spingarn - Credit Suisse Securities (USA) LLC Gautam Khanna - Cowen & Co. LLC Joseph A. Vafi - Loop Capital Markets LLC Ben Klieve - Noble Financial Capital Markets Edward S. Caso - Wells Fargo Securities LLC Tobey Sommer - SunTrust Robinson Humphrey, Inc..

Good day, ladies and gentlemen, and welcome to the ManTech International Corporation First Quarter Fiscal Year 2018 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, this program is being recorded.

And now, I would like to introduce your host for today's program, Stephen Vather, Executive Director, Corporate Development. Please go ahead..

Welcome, everyone. Thank you for participating on ManTech's first quarter call. On today's call, we have Kevin Phillips, President and CEO; Judy Bjornaas, Executive Vice President and CFO, as well as Dan Keefe and Rick Wagner, our two Group Presidents.

During this call, we'll make statements that do not address historical facts and thus are forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to factors that could cause actual results to differ materially from anticipated results.

For a full discussion of these risk factors and other risks and uncertainties, please refer to the section entitled, Risk Factors, in our latest Form 10-K and our other SEC filings. We undertake no obligation to update any of the forward-looking statements made on this call. With that, I'd like to turn the call over to our CEO, Kevin Phillips.

Kevin?.

the budget environment, our market positioning and our opportunity pipeline. The budget environment is very strong. In March, Congress passed the omnibus appropriations for FY 2018 mandating $655 billion for defense between base and overseas contingency operations accounts.

This 8% increase represents a largest funding increase to defense in over a decade. Our customers are focused on rapidly obligating these additional funds against their mission requirements before the end of the fiscal year.

Additionally, the FY 2019 Presidential Budget contains a $686 billion request for defense, which continues the trajectory for strong budget growth and represents a 5% increase over FY 2018 appropriations. Our customers have clear visibility into their funding levels and the technologies required for their missions.

The rapid pace of innovation, coupled with the availability of commercial and disruptive technologies, is applying pressure to traditional government business processes. Customers are demanding speed to swiftly integrate these technologies to ensure readiness and to enhance our capabilities to match and overmatch threats to our nation and our allies.

ManTech's position as a trusted integrator is allowing us to bring these technologies and best-of-breed solutions to our customers' missions. Our growth strategy continues to be well-aligned with the needs of our customers. In the quarter, we received $430 million in contract awards and our last 12-month book-to-bill remains healthy at 2.2 times.

Our total backlog remains at $7.1 billion and our funded backlog stood at $1.2 billion. On our last call, I previewed our expectations of a rapid acceleration on proposal activity. Suffice it to say Q1 was very busy.

Our customers are increasing demand across our core offerings in cyber, secured enterprise and mission IT, and software and systems engineering. In the quarter, we submitted a record number of high-quality proposals highlighting our technology leadership and our successful track record of supporting national and homeland security missions.

As a result, our proposals outstanding figure grew from $4 billion at the end of 2017 to approximately $6 billion at the end of the quarter. We remain on track to submit between $10 billion to $12 billion in proposals for the year. Despite the record pace of proposal submissions, we see no shortage of opportunities.

Our pipeline remains robust at over $20 billion. Now, Judy will provide you with additional detail on specifics of our financial performance and outlook.

Judy?.

Thanks, Kevin. Revenue for the first quarter was $473 million, up 13% compared to the first quarter of 2017. Over half of our revenue growth in the quarter was organic. Direct labor was up 12% year-over-year, and was the primary driver of our Q1 revenue growth. For the quarter, prime contracts represented 89% of our revenue.

Contract mix was approximately 65% cost plus, 25% fixed price and 10% time and materials. Operating income for the quarter of $26.4 million was up 8% from the first quarter of 2017. Quarterly operating margin of 5.6% was consistent with what we had indicated on our last call. Let me highlight a few factors driving operating margin in the quarter.

First, we continued to make investments to support the rapid pace of proposal activity, and second, we saw increased depreciation and amortization compared to last year, as a result of our InfoZen acquisition and other capital investments.

Net income was $20.1 million and diluted earnings per share were $0.51 for the quarter, up 34% and 31%, respectively, compared to first quarter of last year. Since the change in accounting rules for stock option last year, our tax rate has become more volatile.

The strong stock price performance drove up a higher level of stock option exercises in the quarter, which resulted in a lower than expected effective tax rate of 22.1%. The lower tax rate added $0.03 of EPS in Q1. Now onto the balance sheet and cash flow statement. Our balance sheet at quarter end showed $10 million in cash and $66 million of debt.

As expected, we drew against our revolving credit facility as we invested in our business and had increasing net working capital requirements to finance the growth of the business. During the quarter, we used $18 million of net cash flow to fund operations and our DSOs were $0.69 (sic) [69 days] (07:46) for the quarter.

The board has authorized us to maintain our current quarterly dividend level of $0.25 per share to be paid on June 22, 2018. Now, onto the forward outlook. As compared to our previously communicated 2018 guidance, we are raising and narrowing the range on revenue, net income and EPS.

We are calling for revenues of $1.9 billion to $1.95 billion, net income of $80.1 million to $83.3 million and diluted earnings shares per (sic) [per share] (08:22) of $2 to $2.08. Thanks to several recompete wins in the quarter, at the midpoint of the range about 90% of our 2018 revenue guidance is expected to come from current backlog.

Achieving the higher end of the revenue range will be contingent on the timing and pace of material procurement as well as the ramp up of any new contract awards. The implied operating margin guidance for the year remains at 5.7% to 5.8%.

Consistent with what we communicated last quarter, we are continuing to make investments in the business to support ramp up of our new contract and to respond to our best level of bid-and-proposal activity. We still expect capital expenditures to be around 2% of revenue and the related depreciation and amortization to be around 3% for 2018.

Cash flow from operations is expected to be between 1.2 times and 1.5 times net income for the full year. Built into our guidance are our full year effective tax rate of 25.1% and a fully diluted share count of 40 million shares. Now, Dan will speak to our defense and federal civilian business..

ManTech Mission Solutions & Services achieved a strong start to 2018. The growth in Q1, was reflective of the strong bookings that we achieved in the second half 2017. I'm particularly pleased with closing out our Navy and DARPA recompetes in Q1, which leaves us with an extremely low recompete risk for the remainder of the year across the enterprise.

In addition, we expanded into new work with contract awards with two of our current customers, the Marine Corps and the Department of Veterans Affairs. Finally, ManTech continued to maintain a strong portfolio of IDIQ contracts across our customer set. We were awarded a position on the Defense Information Systems Agency ENCORE III vehicle.

It's a 10-year vehicle with a $17.5 billion ceiling used by the Department of Defense and other federal agencies to procure a range of IT services and solutions.

While there is no associated booking with this award, it is an incredibly important vehicle given ManTech's strong and growing presence in providing IT solutions across the federal government.

With respect to contract performance, we have now completed the stand-up of the managed services enterprise IT contract supporting the Jet Propulsion Laboratory in Pasadena, California.

We have fully ramped on our recent wins with Department of State and Homeland Security and are seeing opportunities for contract expansion to bring additional capabilities to our customers. We are also pleased at the integration of InfoZen, which we acquired in Q4 2017.

Their strong capabilities and Agile software development are proliferating across to our company.

Rick?.

Thanks, Dan. I'm pleased to report that the Mission, Cyber & Intelligence Solutions Group also had an exceptional quarter. We saw increasing requirements from several classified customers for our enterprise IT and security engineering capabilities, which materialized in the form of sole sourced contract expansions.

We've also seen contract extensions on several key contracts reducing recompete activity for the year. As Kevin noted earlier, our proposal activity increased significantly in the quarter. Of note, a large portion of our increased proposal activity was from cyber and enterprise IT opportunities across the intelligence community.

And quite frankly I think Kevin and Dan would agree with me across the federal government as a whole. We view these as very attractive markets that will continue to see strong growth given the necessity of secure IT modernization.

I'm pleased to report that in early Q1 we were fully ramped on our recent award with the Army Intelligence & Security Command leading to a record number of hires in the quarter. Attrition in Q1 also dropped to its lowest level in five years resulting in a significant increase in head count.

The investments we are making in training, education and other benefits are showing great dividends. We remain focused on the development of cyber and IT solutions aligned to our customers growing budget areas.

Our growth team has been extremely busy this quarter and with the increased level of proposal submissions in the quarter we expect to see those efforts translate into bookings for the balance of the year and in 2019. I would now like to turn the call back over to Kevin for closing remarks..

Thanks, Rick. As many of you know by now, Dan is retiring at the end of Q2. Dan, congratulations on a stellar career. It has been a pleasure working with you and we thank you for your service.

You have been an integral member of the leadership team here at ManTech and we appreciate everything that you have done not only for ManTech, but also for your service to our country. Before I conclude I want to note that yesterday ManTech was awarded a contract with an agency of the defense department to provide managed enterprise IT services.

I'm not at liberty to discuss many specifics regarding the contract and it is of similar nature to other IT and technology programs we won in 2017, and it is of meaningful size. This contract has not yet cleared its protest period and we will provide more details as soon as we have the necessary customer approval.

We do not expect any meaningful contribution from this award until 2019. We believe this win will provide us strong foundation for ManTech's continued organic growth. In summary, I am pleased that the execution of our strategy is resulting in industry leading organic growth.

I'm optimistic about the future of the business and I am proud that across all levels of the company, we are focused on bringing innovative and differentiated solutions as well as speed and agility to our customers and their critical missions. There is absolutely no question that this is a very exciting time for all of us here at ManTech.

But it's important to remember that our success is the result of putting our customers and their missions above all else for 50 years. With that, we are ready to answer your questions..

Certainly. Ladies and gentlemen Our first question comes from the line of Rob Spingarn from Credit Suisse. Your question please..

Good afternoon..

Hello..

Hi, can you hear me okay?.

We can. Yes..

Okay, good. Well, on the back of such impressive bookings last year, I think you saw about 6%, 7% organic growth in the quarter and you're guiding to an overall growth number of 12%. So I wanted to dig into that a little bit.

With your organic growth for the year, what's embedded in the top line guidance? You may have said it earlier, I didn't catch it. And then how we should think about those very strong bookings last year translating? I know they are on some longer-term contracts.

But I just want to understand how we calibrate a 1.4 book-to-bill in 2017 into what we should realistically be looking for going forward?.

Yeah. So at the midpoint of the guidance range it's a little over 7% organic growth rate for the year. So, and I think, through Q1, we pretty much finished ramping on most of the awards from last year..

And I'd note that some of our contracts are now longer term, many of them maybe up to 10 years versus 3 years prior. So, we have a longer runway and sustainability on the contracts and the revenue for a much longer period in the company as well..

Okay.

And what kind of bookings do you think you get this year going forward? Is there any kind of expectation, and to what extent does the omnibus and the extra money that you spoke to earlier Kevin play into that?.

So, first I'll speak to bidding, $10 billion to $12 billion. Our recompete rates this year are low, it's less than 10%. So, most of the work that we're bidding on is new. And how that plays out is very much depending on our business win rate.

I believe that in both Q2, Q3 and Q4, our Q2, Q3, Q4, this year, a heavier volume of expected awards with a higher weight in Q3. And we believe that provides a strong foundation for growth going into 2019. It's hard to tell what that provides until we see how those play out in terms of contract awards..

Is it fair to expect some of the extra money to start to flow in Q3, as you just mentioned? I know some other contractors are saying this is really a calendar 2019 opportunity. But it seems like O&M money might come sooner.

It sounds like that's what you are alluding to there?.

Yeah. I believe our customers have had clear knowledge of what they need and they've been able to focus on it. And now that we have the funding, as you know, the funding is -there's more going to procurement, there's more going to RDT&E, but there's also money going to sustainment and development around cyber and space resilience (17:56).

So I think that there will be more money around those areas that will be supportive of our position in the market..

Okay. And then just one final one, it's very high level.

But given the kind of selling pressure we've seen in general with defense stocks, less so on the government services area heavier on the hardware side, but do you think that there's much risk, if we should see a political change in Congress with the mid-term elections to the outlook, or do you not think about it that way?.

Well, with any election, there has been more time between the time of the election and any changes in how the procurement cycle or the budget cycle pass and they're just much slower in changes. So it's hard to tell what will happen with the mid-year or any election for that matter.

We tend to think that the overall environment around national Homeland Security doesn't change between administrations nor elected officials within Congress. So we'll have to play that by ear, but we tend to think there's longer runway on the demands for our service..

Okay. Thank you for that..

Thank you..

Thank you. Our next question comes from the line of Gautam Khanna from Cowen and Company. Your question, please..

Yes. Hey, Kevin I was wondering if you could elaborate on your comment about the bid pipeline. So it went up quite a bit, you mentioned the contract win that just happened, that it could be protested, it could not be.

But are there – within that pipeline is there any way to characterize like, how many of them are over $100 million a year? How many kind of big jobs you're pursuing because it looks like you guys are actually scaling up on some of the things you're going after? I'm just curious if there's anything you can give us about the profile of what you're pursuing maybe in terms of size and margin...

(19:56).

I'll speak at a high level and then Dan and Rick can weigh in. So, generally, the timeline it takes to procure is improving the certainty about a procurement once it's let (20:09). Sustaining is improving and there's actually more speed and demand for getting things done within the federal government.

And if you look at our bid pipeline today, it is stronger. If you look at our bid pipeline compared to two years ago, I would say that the amount of procurements that are above a $100 million are about 50% greater than two years ago.

But that's more of a shaping of the customers deciding to either bundle or bid large, but also our position to go after them as well. So we've been strategically working on acquisitions combined about $100 million plus procurements as a prime contractor. We continue to do that.

It is showing in both pipeline volume and the amount of bids that are scaled but also there's consolidations in some procurements. To end I'll let Dan speak to that..

Yeah. And I would just add two points, Kevin. First, certainly across the market, contracts are larger because some are being consolidated and the time period for the contracts is longer. So that makes a number of the contracts larger.

And then my other comment would be if you compare it to where ManTech was, say, five years ago and as we moved up scale, we now have the capability not only go after, but to win. Examples would be enterprise IP contracts that are of scale..

Yeah. And I would add our focus on IT and cyber is driving us towards some of those larger contracts as well..

And do you think this could be accretive to the corporate average EBIT margin, I mean, is there a difference in either the pricing dynamics or contract structures less cost plus more TNM and fixed price, anything or just billing rates generally, I'm just curious? How should we think of that?.

Yeah. So clearly that's a focus of ours, is to improve the forward-looking margins. We're seeing a little bit of shift more towards fixed-price contracts, especially in some of the enterprise IT solutioning jobs. Those over time have the potential to have much higher margins, but initially they're probably in line with our profile.

But in general we're looking long and hard on the impacts of fitting anything that's less than – that would be dilutive to our margin..

And I'll add that we are very focused on investing to respond to the market today..

Right..

And to follow up on Rob's question, yeah, I remember a quarter ago you guys mentioned Q1 may not be a stronger bookings quarter, just based on how the calendar fell in terms of when things would be adjudicated.

Do you feel that Q2 has a lot of balls in the air where there's going to be a lot of adjudication so there's potential for bookings to really move higher or is this kind of Q3 weighted? I'm just trying to get a sense from the seasonal aspect of what you have?.

I would say that Q2, Q3 and Q4 all have a heavy amount of adjudication. So it's not all lumped into Q3 and we see a lot of activity this quarter as well..

Okay. Last question.

Any competitive implications of General Dynamics and CSRA combining? Is it is a threat to ManTech incrementally and just what are your perspectives on that?.

So like any acquisition, any combination we have to look at it and see how it plays out over time. It in one way reduces what normally would have been a competitor in a competitive market, in another way it may add to the higher waiting of the probability of their ability to win.

But we have to play it out by each bid to be able to decide that and how they make that combination work. Rick, do you have any..

I think the other part is just all the work that goes into that combination will certainly drive energy from them in the short-term..

Right. Okay. Thank you very much guys. Appreciate it..

Thank you. Our next question comes from the line of Joseph Vafi from Loop Capital. Your question please..

Hey, guys, good afternoon, good results. Dan, congrats on the retirement. Kevin, George is now just going to work you I guess a little bit harder I would imagine, but....

Well, it's nothing new.

Is it?.

Well, you said it, I didn't, but maybe perhaps we could talk a little bit about the ENCORE III.

if you could remind us were you participating on ENCORE II and is there a time relation we can make here between some of these large wins in IT and managed services relative to maybe some of the tasks that might come out on ENCORE III? And then I have couple of follow-up..

Yeah, to answer the first part, yes, we were an ENCORE II winner. But what I would tell you that is during the ENCORE II period we weren't as capable as the company, four or five years ago in these marketplaces and I think that we're really excited about the ENCORE III. We've invested in people in that arena and we'll see how it plays out..

Okay. And then, I know you commented that JPO (25:40), Department of State and the DHS new wins have kind of fully ramps now.

I was wondering is there a margin implication over the next quarter or two based on those now being fully ramped and volume and perhaps efficiency gains that may ripple through into the numbers moving forward?.

Yeah, so I think in general that pretty much played out in Q1. The bigger impact we've been talking about the last two quarters now is the heavy, heavy proposal volume.

So Q2 I think is going to be very on par with what Q1 looks like and any leveraging on the growth is going to be in the second half of the year and again we're still two-thirds cost plus mix. So not getting the full benefit of the leveraging right now..

Okay.

And then on this new win, which is good news, I don't know, and kind of going back to I think what Gautam was asking, maybe a little bit different way to ask it though is, if you look at these particular large wins where at least from the outside it feels like you have a higher win rate than perhaps you may have expected or versus some of your other bid and proposal business.

I was wondering if you could help us to maybe confirm that win rates on these types of contracts is indeed kind of outsized at least perhaps on a dollar/volume basis versus some of the other business. And then if you think there's more of this specific type of work in your bid and proposal pipeline moving forward. Thanks..

Yeah. So I'll answer the last first and then, to that. So I guess our overall mix of our pipeline is more focused on IT, data analytics and cyber in terms of the overall profile. I think that we had a very good win rate in 2017.

It's not something that we would presume to sustain, but we're feeling fairly good about the fact that we've been able to get on the playing field and win our fair share of work. So we'll have to see how that plays out to the level of new work we have.

But we do feel that given the increased pipeline, the increased volume, our technical solutions that we put in place over the last few years in both groups that we're on a good playing field to have a – not a sustainable to last year level, but a sustainable win rate that may be beneficial to us.

Dan, do you want to mention anything?.

Well, I want to just say that our volume of work is up 2017 over 2016 and 2018 over 2017, so if we can sustain a decent win rate, then our bookings will be strong..

Great. And then Judy, I just missed the organic growth rate in the quarter, I'm sorry..

It was about half of the growth, so close to 7%..

Okay. Great. Thanks, guys..

Thank you. Our next question comes from the line of Ben Klieve from Noble Capital Markets. Your question please..

All right. Thank you. A couple of questions. First, with regards to the ramping of new awards over the – that you've won over the last year. My impression is that, that ramp was going to be – take a little bit longer than that it seems to have taken.

Was I just mistaken or did the process go a little bit quicker than you had thought on previous calls?.

No, I think we've fully expected that we would be close to fully ramped at the end of Q1. So, I think, we're pretty much on par with last year (29:32)..

Okay. All right. I was mistaken. Okay. Not a problem, perfect. And other question I have is with regards to CapEx. I'm wondering if you can elaborate a bit on CapEx spend this year and kind of give us a bit of color on how that will fall between the ramping of new awards versus maintenance, versus other growth initiatives.

I mean, how can we really think about where that money is being applied?.

Yeah. So I think we talked about in the last call, Q4, we had a big spike in CapEx because of the managed services award, the JPL award, that was kind of initial upfront CapEx. But over the course of the year, it's going to – kind of I think we're going to be on par with what we have in Q1, maybe ramping a little bit over time.

But so it's primarily those types of projects where it's a fully outsourced managed services job. And then, we are making internal investments to support our solution capabilities as well as our own internal systems..

All right. Very good. Thank you much. That does it for me..

Thank you..

Thank you. Our next question comes from the line of Edward Caso from Wells Fargo. Your question please..

Hi, good evening and congrats. We hear a lot of clients – government clients want to embrace new technology. They want to embrace the cyber, yet the contracting process is still sort of 1950s.

Are you seeing any movement at all in accelerating the contract process to actually be relevant to what they're asking for?.

Yeah. We're starting to see customers talking about using contracting practices that are more flexible. The G-Link (31:28) conference this past week.

There was a lot of discussion about that, the idea of how can we make contracts flexible and agile so that we can bring in new technologies, and as technologies change quickly be able to adapt these contracts to match that.

So, they are investigating how to do that and as you know in the government contracting area, that takes a lot of work and they are working on it..

My other question is around the supply side; the people, it sounds like you had a good quarter on that front.

Can you find these generally younger, new tech-enabled people that have security clearances, and I know Kevin's very active on that front, but are you finding what you need?.

The answer is, no and yes. I mean, we've been able to over the last six months increase our staff supporting customers' mission pretty significantly based on contract awards and still have about the same number of open requisitions today that we had six months ago that we're trying to fill.

But the harder to fill ones around the technologists in a – what I would call a negative unemployment rate is very challenging and that's why we're very focused on that from an internal training perspective as well as from pressing – and from industry side towards the security clearances, so we can provide the talent at all levels to be responsive to the needs of the nation..

And last question from me. We're hearing that given the sort of relatively short timeframe till the end of the government year that a lot of money will just be put onto existing contracts, expanding them – extending them.

Do you have the right contracts for that, is there some M&A maybe to help you capture contracts to get in position to sort of get this sort of IDIQ fill-out? Thanks..

Yeah.

I think we definitely do and we're already starting to see evidence of that, that's what we're seeing in terms of some of the contract expansion in the IT monetization area and in our security engineering area is that customers have that money and they're extending work into these contracts that are already existing and have long period of performance to be able to do this work..

Great. Thank you. Congrats..

Thank you. Our next question comes from the line of Tobey Sommer from SunTrust. Your question please..

Thanks.

I wonder if I could start out with, what was the growth in direct labor in the quarter and I'm kind of leaning towards expanding on the question about hiring that I wish to ask?.

Yeah, it was 12%..

Do you have to make any changes in the way you're going about hiring or in the kind of engine and processes to be able to accommodate not only the growth that you've already got in new contracts but the outlook?.

Yeah. I'll tell you that we've definitely ramped up our marketing aspect of recruiting. The company had a successful year and success attracts strong people. And then also, we'll offer some training through Purdue University as an example that is attractive to people in the cyber arena.

So, the number of initiatives we're taking at the marketing and our recruiting team and really with some recent hires have really ramped up the talent of our HR recruiting department..

The other thing too, is a lot of these new wins have been, it's not new work you see the consolidation or it's takeaway, and so there is an in-place workforce for us to start with..

Right. Shifting to the margins, it's been a while now that LPGA seems to have been receiving as a mechanism for at least some customers to let certain work.

Where are we in that process do you think, and is there still a kind of a potential for a margin tailwind as some of that work comes off those old contracts and is re-lap where appropriate under a different format?.

Well, I think, there is tailwind. I think we'll see some improvement, but I'll tell you as far as how customers evaluate with respect to the price, it very much varies by my customer set. I have some customers that are best value, they seem to always go to the lowest price.

And I have some customers that are very much best value and you can see where best value wins as long as the prices are reasonable..

and I'll add that customers are looking for solutions to complex issues where they're not looking for solutions to complex issues more sustainment, they're looking for cost effectiveness in order to retool their budget towards these higher needs. So it's very mixed..

Okay.

Is there any noteworthy thing that kind of isolate in terms of investments or particularly maybe involving ramping large contracts that are dampening near-term margins, but that you have visibility into those kind of reversing or being alleviated in a quarter or two?.

I'll let Kevin talk to the program side of it, but the biggest margin issue we're dealing within the first half of the year is this high level of bid and proposal activity..

That said, on the program, yes, we're investing in ensuring that we have great success on the programs and for those that are more fixed price in nature it totally depends on how we ramp that up and what the overall performance is long-term just like any other contract.

So there is potential upside in out years, no matter of how well we execute operationally as we ramp up these programs..

Thank you very much..

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Stephen Vather for any further remarks..

As usual, members of the senior team will be available for any follow-up questions. Thank you for your participation on today's call and your interest in ManTech. Have a good evening..

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day..