Ladies and gentlemen, thank you for standing by. Welcome to Comtech Telecommunications Corporations Second Quarter Fiscal 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference is being recorded Thursday, March 11, 2021.

I would now like to turn the conference over to Mr. Jason DiLorenzo of Comtech Telecommunications. Please go ahead, sir..

Thank you, and good afternoon. Welcome to the Comtech Telecommunications Corp. conference call for the second quarter fiscal year 2021. With us on the call today are from his home, Fred Kornberg, Chairman of the Board and Chief Executive Officer of Comtech; and at our corporate headquarters, Michael D.

Porcelain, President and Chief Operating Officer; and Michael Bondi, Chief Financial Officer..

Thank you, Jason, and good afternoon, everyone, and thank you for joining us on this call. Today, we will be discussing the results for our second quarter of fiscal 2021 and our outlook for the full fiscal year. As you see from our announcement this afternoon, our second quarter of fiscal ‘21 exceeded our business expectations.

Our second quarter net sales were $161.3 million, with an adjusted EBITDA of $18.1 million, both of which exceeded our expectations and prior guidance. In addition, we are targeting fiscal 2021 sales to be in the range of $610 million to $620 million, with an adjusted EBITDA in the range of $74 million to $76 million.

Although, the pandemic is by no means over, we continue to believe that the worst impact on our business is largely behind this. Our strategic initiatives are paying off and we are clearly holding our own. Our pipeline remains strong and if business momentum continues as it is, we anticipate a book-to-bill ratio in fiscal 2021 to be in excess of 1.0.

Moreover, although we are only halfway through fiscal 2021, we are already excited about fiscal 2022, as an overall domain, demand remains strong and we believe we’re seeing a number of increased opportunities, some of them very, very large. In simple terms, we have the right products and the right technologies.

If the issues from COVID-19 fade away, as we expect them to, fiscal 2022 will become a banner year for Comtech. Now, let me turn the call over to Michael Bondi, our CFO who will provide additional commentary about the second quarter performance and business outlook.

After that, Michael Porcelain, our President and CEO will provide an update on our business, including our exciting acquisition of UHP, which we were able to close this month. Then I will come back before the opening to -- line to the questions-and-answers.

Mike?.

Thank you, Fred, and good afternoon, everyone. As mentioned, our net sales of $161.3 million in Q2 were similar to what we achieved in last year’s Q2 and was $26.1 million higher than what we achieved in our first quarter of fiscal 2021. Of the $161.3 million of sales, 78.1% were to U.S.-based customers, 21.9% to international customers.

Bookings for the second quarter were $215.8 million and our consolidated book-to-bill ratio was 1.34. We finished the quarter with healthy backlog of $660 million, which represents a growth of about 9% since Q1.

And when you factor in the total unfunded value of certain multiyear contracts that have been awarded to us, but which are not yet in our backlog, we have visibility into over $1.1 billion of potential future revenue. Our gross profit percentage in Q2 of fiscal 2021 was 34.5%, as compared to the 37.5% achieved in the second quarter of fiscal 2020.

The year-over-year change in gross margin was largely expected and reflects the period-to-period decrease of net sales in our Commercial Solutions segment, which historically achieves higher gross margins than our Government Solutions segment, as well as the ongoing impact from COVID.

Given all events and expected level of sales, we continue to target a consolidated 35% to 36% gross margin percentage for fiscal 2021. SG&A for Q2 of fiscal 2021 was $29.5 million or 18.3% of consolidated net sales, as compared to $29.4 million or 18.2% in Q2 of fiscal 2020.

Our Q2 reflects a full quarter of expenses from our CGC acquisition, which closed last fiscal year on January 27, 2020. In Q2, we incurred $600,000 of restructuring costs related to the relocation of production of certain of our satellite earth station products to a new 146,000 square foot facility in Chandler, Arizona.

We expect another $600,000 of such costs in Q3 and another $900,000 of costs in Q4. These costs may fluctuate a bit. Turning to R&D, we spent $12.7 million in the second quarter or 7.9% of net sales, representing a decrease of $1 million from last year’s Q2. The majority of this spend was in our Commercial Solutions segment.

Total stock-based compensation for the second quarter was $1.3 million and amortization of intangibles was $4.8 million. Looking forward, we continue to expect stock-based compensation to approximate $11 million to $12 million.

Given the closing of UHP acquisition on March 2, 2021, total amortization of intangibles in Q3 and Q4 is expected to approximate $5 million per quarter, resulting in expected fiscal 2021 intangible amortization of approximately $21 million..

Thanks. Good afternoon, everybody. We are really pleased with our Q2 2021 business performance, and as Mike just said, in the early to -- December 2020 period, the world did experience a spike of COVID. The second wave impacted many of our international end customers a number of whom purchase our satellite earth station technology products.

Had this second wave not hit, we actually believe that Q2 bookings could have been significantly higher than the amount we ultimately reported.

As a result of the second spike, we continue to conduct most of our global non-production related operations using remote working arrangements, curtailed most business travel and we have maintained social distancing safeguards in our workplaces.

Also, several anticipated large projects in our Government segment were delayed and have shifted into fiscal 2022. COVID also significantly impacted our operations in the United Kingdom, forcing the complete closure of our antennas design and manufacturing center in December 2020. This facility is now reopen and beginning to resume normal operations.

Although, the COVID-19 pandemic is by no means over and additional waves could occur again, we believe that growing COVID-19 vaccination inoculations will lead to improve business conditions. The reopening of the world economy does bode well for us for the rest of fiscal ‘21, and perhaps more importantly, we believe it bodes well for fiscal 2022.

We believe our long-term fundamentals remain strong, and as I will explain, we continue to think that both our segments are well positioned for growth. In our Commercial Solutions segment, net sales were at $7.8 million this quarter and it was a great quarter for booking.

We received orders aggregating $179.1 million, resulting in a book-to-bill ratio of 2.04 for this segment. The quarter included $111.6 million of initial bookings for our contract, valued up to $175.1 million to design, deploy and operate next-generation 911 services for the Commonwealth of Pennsylvania.

This contract was awarded to us shortly after the Q4 2020 receipt of a $54 million contract to design, deploy and operate NG911services for the State of South Carolina. Based on our anticipated timing of performance, we expect meaningful revenue contribution from both of these contracts to begin in fiscal 2022.

Clearly, we believe we are seeing positive momentum in our public safety and location product lines. Although, Q2 2021 sales were lower than last year’s Q2 sales, as we work through a previously announced transition of AT&T 911 wireless call routing solutions, business prospects are clearly bright..

Thank you, Mike. As I mentioned before, I’m very pleased with how our business is performing. As we enter our third quarter of fiscal 2021, I believe we are on track for a very respectable fiscal year considering everything that is going on in this world.

Further, we are looking forward to a strong prospect in fiscal 2022, including the additional opportunities which UHP will bring with their TDMA product line.

Given our business outlook, our Board of Directors declared a dividend for the second quarter of fiscal 2021 of 10% -- $0.10 per common share payable on May 21, 2021 to shareholders of record at the close of business on April 21, 2021. Now I would like to proceed to the question-and-answer period of our conference call.

Operator?.

And we will take our first question from Mike Latimore. Please go ahead. Your line is open..

Thanks. Yeah. Congratulations on the great results there. I guess, Mike, you mentioned that, you’re expanding capacity or a new facility and in anticipation of maybe some large orders coming down the pike.

I guess, can you just elaborate on that a little bit? What product areas of that, yeah?.

Yeah. I mean we are bidding on, and as you mentioned, our last conference call, a number of large opportunities with several customers, some new and some existing. And obviously, this is a multiyear type of a thing and things that you can read about in the newspapers and so forth like that.

But we do see our current product line, with our SCPC modems, the big shift going to 5G in the international market, the launching of LEO satellites around the world. You add these trends up and we just see a lot of opportunity over the next few years..

Got it.

And then the 911 category, next-gen 911, I guess, do you have other good sized prospects for kind of next-gen 911 deals?.

Yeah. We do. We’ve been waiting on one particular opportunity that we’ve talked about as being a large opportunity that’s out there that we feel pretty comfortable that we will get. We’re really just waiting for the customer to work through legislative funding that they need to do on their side. So that’s a contract we ultimately expect to get.

I would say sooner rather than later. But obviously, it hasn’t come yet. But we think that’s on the horizon. And yeah, there are a number of bids out there that we are actively working on that, we hope that over the next 12 months to 18 months that we could report some good news on..

Okay. Great. And just last one, I guess, on the 911 business, kind of as you’ve had a number of large contracts, maybe add some more, and then kind of by the -- I guess by the December timeframe, you’ll be lapping the -- effectively lapping the AT&T deal.

So I guess, what kind of growth rate do you think this kind of normalizes to overtime here?.

It’s -- when you use the word normalize and you spread that over a number of years, it could be maybe in the mid-to-high single digits. But the business is lumpy. You get a contract. You have to do some work and then you get straight line for a while. So as you get this contract, the revenue base will grow.

I don’t know if it translates into specific annual growth rate. But the numbers that we expect to achieve will hopefully grow that product line over the course of a number of years..

Okay. Great. Thanks a lot..

Our next question will come from Asiya Merchant. Please go ahead. Your line is open..

Great. Thank you very much and congratulations on the quarter as well. I think, Fred mentioned like a banner year shaping up for ‘20 for the next fiscal year. You guys obviously are embarking on a bunch of stuff that you guys already talked about.

Should we expect, like, revenues to exceed where they were back a couple of years ago and even before the pandemic you guys were talking about somewhere in the range of $715 million, $720 million, maybe even a little bit higher than that for the business? Is it fair to assume that as you get recovery and as you embark, plus you have the acquisition as well, which should contribute a little bit that revenues could approach those levels?.

Oh, boy. I hope you’re right. But I would say to you, look, it’s very early and it’s -- we -- we’re seeing just what we believe to be the start of the reopening in the United States. Europe for the most part from what we see still is significantly closed in areas and economic activity remains suppressed. There are definitely some terrific signs.

If you look at the first six months of this fiscal year, we had a year-over-year 18% in total bookings increase. So we’re seeing good signs of it. Q2 was nice, although, at the same time, we’ve seen things shifting around. So I think, well, our take here is, we want to see how the next six months play out this year.

But from every sign we’re seeing 2022 is looking good. It’s certainly looking better than 2021. I think that statement, we feel good to say, but we’re not going to put numbers on it yet. It’s just way too premature..

Great.

And then you guys talked a little bit about expansion from all these efficiencies that you’re driving towards? Can you level set, like, after hitting margins where they are in fiscal ‘21, how we should think about at a higher revenue run rate the EBITDA margin?.

Yeah. Look, I mean, right now we do believe margins can be approved. If you look at what we did back in 2019, I would say, that’s the next step we got to get back to. So no matter what the revenue is, we’d like the margin to kind of go back to at least the 2019 level, where we had increase in revenues and increase margin.

We think we could do better than that. But it’s -- it’s going to take some time and we’re going to work through the facility move in the second half of the year and the streamlining of our efficiencies at our Government segment and as we think about again next year, the hope is between incremental revenue and higher and better margins.

Yeah, we think, we’ll -- I’ll use my phrase, well, we’ll think we’ll have a banner year next year. But the number we’re targeting is higher than the 12% or so that we expect to achieve, obviously, in that -- from that perspective. But again, these things are complicated and we’re going to do things at a relatively slow pace.

But what we’re hoping to get back to margins and we’d like to that -- we’d like that first step to get back to maybe to 13%, 14% range is the first step that we’d like to achieve..

Okay.

And was there anything between the fiscal 2Q versus fiscal 3Q, why fiscal 3Q was guided down? I believe, sequentially, it’s been like an up quarter for you guys, but maybe there was something in terms of whether it was demand or revenue that got pulled into the fiscal 2Q two versus fiscal 3Q?.

Yeah. The way we’re seeing this year, and again, we’ve always said, it’s very difficult to compare our business. Look, at the end of the day, if you look at the midpoint of our guidance, our fiscal year for the most part is going to be very similar to last year in terms of Q2, Q3. Last year in Q3, we did $135 million of total revenue.

And Mike said here, we’re going to do about one $140 million. So, it’s really just timing. The -- we had a big shift in fielding schedules in the U.S. Government in Q2 of this year going into Q4 and some shifting into next year. So at the end of day it’s really timing..

Okay. Thank you..

And we will take our next question from Chris Sakai. Please go ahead. Your line is open..

Hi. Hi, guys. All right. Well, just have a quick question, I know, it was Mike went over what Q3 net sales to be $140 million and then was it EBITDA was that, I didn’t get the last part.

What was that?.

Along with the $140 million, we’re expecting EBITDA to be about 10 million in Q3. And then we’re holding for the year at the $75 million. So, obviously, everything shifted to Q4..

Okay. All right. Great. And then, let’s see, I just want to get a sense of the UHP acquisition.

I mean, what -- how much do you guys think of contribute to revenue right off the bat and then -- or how many is going to take into 2022 to really start to see things?.

Yeah. I mean, obviously, it’s not a material enough number for us to talk about and given the nature of the competitiveness of this market, we’re not going to give out a number. We can tell you that, this has been a long time coming. You might remember we announced this acquisition first in November of 2019, so it’s been more than a year plus.

Customers are waiting for this thing and finally now that Comtech has closed on the acquisition, we can start talking to our customers about what the roadmaps are and how things are going to be fit in. Now that we know that we have actually closed the transaction. So I can tell you the reception from our customers is very well received.

Initial orders have started to come in based on people just wanting to move forward. UPH -- UHP, if you look at some of their prior announcements that they put out by themselves, I would refer you to those announcements for what’s out there in the marketplace.

But yeah, we think it’s going to add, certainly, year-over-year growth to that product line and we’re delighted to have them..

Okay. Great. And then I just want to ask a question about, so for instance, just, I know, the NG911 contract with the Toronto Police Department. I want to see so what -- you mentioned the maintenance period.

For how long is that? And then, when would you expect renewal there with them?.

Chris, I’ll take that. Those contracts tend to be, the first year like an implementation year where you’re putting in the equipment and then usually have a tail of maybe two years to three years. And as we always say, once you get there, the cost of switching is high, so you’re likely to get the optional renewals from the customer.

So, but I believe that contract is at least two years to three years..

Okay.

So what I guess as far as the renewals go, I mean, is it -- and the ones that you’ve already had, what’s the percentage of them renewing?.

It’s pretty high. We’ve been -- Solacom has been a part of Comtech for a couple of years right now. And to be quite honest with you, I’m not sure we’ve lost a contract on a renewal since I’ve been here. So it’s definitely probably close to 100%. Maybe there’s a few small ones, maybe that I’m not even aware of.

But our customer retention rate nearly has to be 100%. And we’re certainly picking up market share, as you can see, based on this recent win in Toronto and some of the awards that we’ve gotten over the last six months, so pretty high..

Great. And last one, I guess, I know you guys signed, had a big deal with the Army.

Do you see any sort of -- anything like that in the future coming up?.

Yeah. There’s a number of programs that we are working through. Again, Army programs are very difficult to predict. Nothing to report to you today and stay tuned..

Okay. All right. Great. Thanks..

Our next question comes from Joe Gomes. Please go ahead. Your line is open. Joe, please go ahead. Your line is open from Noble Capital..

Thank you. Let me add my congratulations for the nice quarter also. Just real quick back, we could circle back for a minute here on UHP. You weren’t able to get the Russian assets there, I was wondering if you could give us a little color on what happened there.

Because that was seemed to have been the large hang up for the approval process for acquiring the entire company was something that in the past you had said you really wanted to get those assets.

So if you could talk a little bit about that, I appreciate it?.

Sure. We -- from the day we first announced it in November 2019, the main part of UHP was based in Canada. And that clearly was the gem of the company. At the same time, we -- we’d love to expand sales in Moscow. So you have to go through a regulatory approval process in Russia to do that.

And at the end of the day, as you kept seeing in our press releases, boy, it sure took a long time. And we came to the conclusion sometime in December and January of this year that we don’t want to wait anymore. We’ve been waiting for a long time.

COVID, certainly delayed things, everything from their Prime Minister who unfortunately developed the COVID thing, I mean, you can name it one thing after another. But we ultimately decided let’s move forward with the transaction that we have now.

We obviously, as we said, in the press release, we have the right to market into the region in Russia and we expect to do really well. And so, at the end of day, we just really don’t want to wait any more. We want to move forward and move forward with our business plans..

Okay.

And now that that is complete, what does the acquisition pipeline look for you guys, are you kind of pulled back here and let’s just focus on what we’ve got or are you still out there looking for additional opportunities on the acquisition front?.

I think we’re just -- at this point, I’d say, our primary focus right now is to execute. That’s what I would say. We have so many good opportunities internally that we see and given the move and the streamlining of operations. That is our immediate focus. From a large acquisition, do I expect us to do a $500 million acquisition tomorrow? No.

Are there some other smaller type things that are out there that we’re thinking about and talking to? Yes. But that’s the way I would describe the way we’re thinking about it..

Okay. And one last one kind of a big picture here. Michael, maybe you could talk a little about, Fred you too, if you wanted to, I mean, you started off saying you believe the worst of COVID is behind us. But then, in your commentary, you mentioned how you continue to see stuff shifted to the right.

In the press release, you talked about you didn’t, because it COVID you weren’t going to provide some types of guidance and everything. So I just trying to square that circle, so to speak, if the worst is behind us, why are we still seeing some of these things being shifted or is it just a near-term impact of or lingering, so to speak of COVID.

But as you mentioned, the orders are coming in strong. I’m just looking for more -- little more color detail there? Thank you..

Thanks. Let me take that one. I think what we’ve seen is a lot of shifting to the right. And what does that mean? Some shifting is into the third quarter and fourth quarter. Some shifting is actually into fiscal 2022. Besides the shifting of the requirements, there’s also a -- an actual request by some customers, just not to ship.

Even though we have some orders that we could ship, we can ship, customer doesn’t want it. So there’s multiple reasons out there because of COVID, various customers taking various positions.

Now, we think the COVID situation should be over, hopefully this summer, based on the vaccines being available and hopefully the worlds will get inoculated and go back to normal. Could that happen in a short period of time? We hope so. We certainly don’t know. We don’t know. Could there be another spike? Yes, they could.

But for the moment, what we see is, we see a start of at least dialogue, at least dialogue in various programs that we just set down during that period, specifically, the international area was just impossible to do any business and that’s where our satellite business was mainly operating.

And I think having that’s hopefully solve that will put us hopefully backed into at least the 2019 type of business situation internationally. The other thing that I might mention is, as Mike mentioned, the UHP acquisition just took us so long, so long. We were hoping to get obviously the Russian business with it.

But in the end, we just made the decision that the world’s business, especially with the market opening up should come first and we pulled the trigger and we acquired the Canadian operation and not the Russian operation. We still think we can perform in Russia and do well.

However, we don’t want to wait any more on the market and the rest of the world. Now, UHP gives us product and technology, and a platform to operate within a TDMA market. As everyone knows, we’ve been operating in the SCPC market, which is the long channel, but smaller market.

The low channel TDMA market, we haven’t even been operating and that is 3 times as big as the SCPC market. So, even though it’s a small acquisition, I think with our sales force and our remaining product lines combined with the UHP, I think will enable us to really attack the larger market. TDA, I’m sorry, COVID-19 notwithstanding..

Great. I appreciate that. Thanks for taking the questions, guys..

Yeah. Thanks, Joe..

We will take our next question from Kyle McNealy. Please go ahead. Your line is open..

Hi, guys. Thanks a lot for the question. Yeah. I was wondering if you could give us a sense for the current growth rate of satellite ground station products, we heard that it’s positive in the January quarter.

But can you give us anything more precise than that, in terms of a number around it? What was it last quarter? Has it gotten better this quarter? Thanks..

Yeah. Kyle, I know, you always try to pin us down on numbers as precise as you do. But right now it’s -- we view the business as probably a low single-digit growth business on an annual basis and then there’s these large projects on top. And we just can’t tell you when those large projects could come in and what those numbers may be.

But from a modeling perspective, we think the trend, putting COVID aside and the timing issues of it, we think that business is about low single-digit market for us..

Okay. Great. And next one is around the Heights platform and it kind of connects to the last question that was asked. I know the idea there was that you could cover some traditional TDMA use cases and cover some aspects of the TDMA segment of the market.

I am wondering if you have any kind of sense for what kind of penetration you’re getting into use cases that would have otherwise selected TDMA, but may have gone with Heights.

And what’s the mix of TDMA like applications versus SCPC for your Heights deals so far?.

We don’t really see any cannibalization, if you will, between the Heights business and what the UHP business brings to the table. Clearly, Heights was getting into higher, call it, the mid part of the market where TDMA or the volume of data was higher than call it low end TDMA.

But UHP really allows us to go into the small enterprise market and multiple terminals. So you’re talking about thousands and thousands of terminals with, call it lower data rates. That’s the market that we were never in, and Fred mentioned it, to you that the market is probably 3 times to 4 times the size of SCPC.

And again, not naming other competitors out there, but we just didn’t play in that market because we didn’t have a product in there. But as the Internet Protocol continues to expand in rural areas around the world and the need for transmission of 4G and 5G is rolled out in remote areas of the world.

The only way you could do it is satellite and so we really have a system a TDMA based system that can be worked in that areas. And then when you get to the large cities, which is where we have traditional strength, that’s where our SCPC modems come.

And so we believe we’re going to be the only company in the world to be able to offer a comprehensive integrated solution to our customers over time. You want to go into the rural areas, the TDMA UHP product is good product, as that volume increases and as a sophistication that network increases, you might go to a Height system.

And we’re going to -- that’s what our customers are excited about that they have options and they have options to work with one customer with a strong brand and Comtech being a much bigger company than UHP that we think is going to give a big uplift to people that were making purchasing decisions of which brand to go with.

We -- Comtech didn’t have one before. Now we do..

Okay. That’s great. And given the strong bookings in back longest quarter and the overall January quarter results, we would have thought you’d have more confidence in the full year. What’s holding you back there in terms of changing the full year guide, taking it up at all? Is it really driven by the push outs in the Government segment, are they….

Yeah..

I guess you’re suggesting that slower through the Q3 and Q4 period?.

Yeah. I mean, it’s certainly not a lack of confidence. We’re just as confident as we were before, if not even more. And to your point, the backlog increased almost 9% in Q2 versus Q1. So we do have a shifting of products from Q3 to Q4 and Q4 into 2022.

So, we’re just as confident and I would say more confident about 2022 then we were just three months ago. So, look, you read the newspapers and you see starting the reopening in the United States. It’s not like that in the international world. They don’t have the vaccines yet in parts of Africa and parts of South America and Latin America.

So they are a couple of months behind where the U.S. is. We think it’s going to break free and post-pandemic recovery is going to happen and that will make us do better. But it -- we’re pretty confident on where we sit and if shifts happen, more shifts happen, we just deal with them and maybe we have some shifts from 2022 into -- back into 2021.

As Fred mentioned, we did have customers that have said, don’t ship, we don’t want people in our facility. Maybe they start telling us to bring this stuff today. We don’t know. We’ll just deal with that as it comes through and that’s how we manage the business..

Okay. Thanks very much. That’s it for me..

And we have a question from Chris Quilty. Please go ahead. Your line is open..

All right. Thank you. I wanted to follow up on UHP and I was hoping you could talk a little bit about both the branding strategy of how you intend to brand and I guess channel, as well as the manufacturing.

I mean, how do you intend to fold it in and position their product line, which is a very different product line than your traditional SCPC products?.

Look, from a manufacturing perspective, it’s clear we have the skill to do modem manufacturing. So, I would say to you, it’s very much like our existing product set, to build the modem. We know how to do that pretty well.

So, we’re going to obviously build those modems where we can in the lowest cost space and whether that’s through an outsourced manufacturer or doing in our new facility in Chandler, that’s our strategy. In terms of the brand, everybody knows Comtech in our space and everybody knows UHP.

The reaction to our customers that has to keep it simple is, now Comtech/UHP product. People know the UHP is revolutionary TDMA technology. They know what it is. I think customers in the past had concerns over the small nature company that UHP was.

Could they provide the support and service necessary? You put that Comtech name in front of it, that changes the game for those customers. So the simple branding strategy right now is Comtech/UHP. As we look to the future, might we tweak that a little bit, maybe, but right now that’s our branding strategy and we think it’s going to serve as well..

Got you.

And how does adding the UHP line impact your R&D strategy, in terms of, product areas that you want to invest in or end market applications and does it allow you or cause you to shift your R&D focus in any way?.

Well, we’re really focused on integrated solutions and network solutions, whether it would be Heights or whether it would be UHP and how those products will work together. That is an area of focus. But I don’t see any significant change in how we think about R&D.

We definitely take a long-term view and we’re going to deliver a product that our customers want..

Very good. Thank you..

And we do not have any further questions in the queue. I will turn it back over to the speakers..

Hey. Thank you very much. That’s the end of today’s call. Thanks again for joining us today and we look forward to speaking with you again in June..

This concludes today’s program. Thank you for your participation and you may disconnect at any time..