Randall N. McCullough - Chief Executive Officer, President and Director Kyle S. Macemore - Chief Financial Officer, Chief Accounting Officer, Senior Vice President and Treasurer Steven M. Larkin - Chief Operating Officer.

Alex J. Fuhrman - Craig-Hallum Capital Group LLC, Research Division Justin Ruiss - Sidoti & Company, Inc. Jay Richard Harris - Goldsmith & Harris Asset Management, LLC Rick Fetterman - Fetterman Investments, Inc..

Hello, and welcome to the Charles & Colvard, Ltd. Third Quarter 2014 Results Conference Call. [Operator Instructions] Please note, this event is being recorded. Company's management may make forward-looking statements both during the call and in the following question-and-answer session.

These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from what they discuss here.

These risks and uncertainties are available for you in the press release itself, as well as with the company's filings with the Securities and Exchange Commission. You can obtain these documents from the company's website at www.charlesandcolvard.com. They're also available on the SEC website, sec.gov.

I now would like to turn the conference over to Mr. Randy McCullough. Mr. McCulloch, please go ahead..

Thank you. Good afternoon. Thank you for taking time to join us in recapping the third quarter ending September 30, 2014, and allowing us to update you on our progress to date. First, let's take a minute and have Kyle Macemore, our CFO, review the numbers..

Thank you, Randy. Good afternoon, everyone, and thank you for joining us today. As announced in today's press release, net sales for the third quarter of 2014 decreased 34% to $4.5 million compared with $6.9 million in net sales during the same period of 2013. U.S.

net sales for the third quarter were $3.5 million, a decrease of 9% over the same period in 2013. International net sales for the third quarter of 2014 were $1 million, a decrease of 66% compared to $3 million in international net sales in the third quarter of 2013.

Wholesale net sales decreased 46% this quarter compared to the third quarter of 2013 to $3.4 million and comprised 76% of net sales. The company's direct to consumer businesses increased 114% in the third quarter to $1.1 million or 24% of net sales.

Net sales of loose jewels decreased approximately 52% to $2.3 million in the third quarter and comprised 51% of sales this quarter compared with $4.8 million or 70% of sales in last year's third quarter. Net sales of Forever Brilliant loose jewels in the third quarter of 2014 were approximately $1.1 million, or 49% of our loose jewels sales.

Finished jewelry net sales during the third quarter of 2014 were $2.2 million, an increase of 8% as compared to the same quarter in 2013. Gross margins for the third quarter of 2014 were 28% compared to gross margins for the third quarter of 2013 of 45%.

The decrease in gross margin percentage was due to the sale at lower gross margins of slower moving inventory, a lower revenue base to absorb fixed overhead costs, an increase in inventory valuation allowance associated with our fashion jewelry and a higher portion of sales in the third quarter of 2014 coming from finished jewelry compared to the third quarter of 2013.

Operating expenses totaled $4.3 million in the third quarter of 2014 compared with $4.2 million for the same period of 2013. The company recorded a net loss for the third quarter of 2014 of $3.1 million or $0.15 per share compared with a net loss of $1.2 million or $0.06 per share in the third quarter of 2013.

The company ended the third quarter of 2014 with $2.7 million of cash and cash equivalents on the balance sheet compared to $3.4 million of cash and cash equivalents at the end of the second quarter of 2014.

In addition, accounts payable at the end of the third quarter reduced to $2.6 million compared to $3.7 million at the end of the second quarter of 2014. Inventory at the end of the third quarter of 2014 was $41.1 million, which was a decrease from $41.5 million at June 30, 2014.

Loose jewel inventory was $33.1 million, and finished jewelry inventory was $8 million. As we discussed previously, we expect inventory to continue to decrease in the remainder of 2014 and be a positive source of cash flow. The company has no debt and not utilized the $10 million credit facility entered into with Wells Fargo at the end of June.

I'd now like to turn the call back over to Randy..

Thanks, Kyle. Let me begin with expressing that no one on the Charles & Colvard team takes pride in delivering a soft quarter. As I said in our press release today, the third quarter was negatively impacted, primarily as a result of decreases in sales in our international markets.

In the third quarter of 2013, as we began to expand in China market, we had significant sales to several international distributors. Due to economic and marketing conditions, and our ongoing evaluation of our distributors, we were unable to replicate those results this quarter.

And as a result, saw a decrease in sales through our distributors in the China market. While we are very disappointed with these results, we remain focused on increasing sales regardless of market conditions.

As such, we are concentrating on several initiatives to strengthen our positioning well into the future and drive revenue growth, especially in the U.S. market for the fourth quarter, which is historically has been strong for us.

For example, we formalized an agreement last month with another large retailer e-commerce site to offer Forever Brilliant moissanite jewelry for sale. Offering Forever Brilliant via multiple retailers' websites represents one of our initiatives to expand the availability of moissanite.

We expect our fulfillment capabilities to continue expanding our retailer base while increasing our visibility among new groups of consumers and ultimately increasing Forever Brilliant brand awareness.

You can purchase Forever Brilliant jewelry today at major web retailers, including Kohls.com, Helzberg.com, Target.com, Ross-Simons.com, Fingerhut.com and soon, we expect Ice.com.

In addition, expanding on the collaborative theme that inspired us to launch the Survivor Collection, we are exploring additional partnerships with sellers, designers and artists. We believe these are steps in the right direction and will allow us to leverage not only our relationships in channels, but the brands and channels of others as well.

Simultaneously, as our online sales continue to improve, we are bolstering our online presence and marketing in several ways. Most recently, this is demonstrated by the launch of our new user-friendly and welcoming and highly functional corporate website, which you can see at www.charlesandcolvard.com.

Also, we launched the Survivor Collection website that has received some significant recognition among cancer survivors. We look forward to sharing news about our progress as these and other initiatives unfold. The Survivor Collection can be purchased in Boscov's Department stores, Rogers & Hollands jewelry stores and Ashcroft fine jewelry stores.

We expect the fourth quarter to benefit from our investments in our direct-to-consumer sales and marketing initiatives. Moissanite.com and Lulu Avenue sales have continued to grow collectively 85% year-to-date over same period last year.

We believe these revenue gains of our direct to consumer and e-commerce website, Moissanite.com, and direct selling business opportunity, Lulu Avenue, both have considerably increased consumer awareness. And as a result of multiple social media campaigns, increased bloggers' activity and satisfied customers spreading the word.

We believe e-mails, phone calls and reviews posted from customers who are delighted with the service and merchandise they receive, we believe both Moissanite.com and Lulu.com are well positioned for continued sales and increases as we head into the 2014 holiday season.

JTV has significantly increased their sales of moissanite jewelry and loose stones for the year. As a result, additional hours featuring Charles & Colvard Moissanite are scheduled for the fourth quarter, which we believe will provide additional revenue growth. Catch the dates and times to be posted on our newly designed charlesandcolvard.com.

Our sales team remains committed to the success of our highly valued existing moissanite distributors and retailers in both the U.S. and abroad, with co-op marketing initiatives in place for this holiday season. We are seeing some resurgence of moissanite sales in India and China recently and expect our continued sales efforts here in the U.S.

to drive incremental revenue growth. Let me take this opportunity to have Steve Larkin, our COO, discuss further our direct-to-consumer initiatives.

Steve?.

Thanks, Randy. The third quarter direct-to-consumer businesses increased 114% compared to the third quarter of 2013. And as Randy mentioned, they're up 85% for the first 9 months of 2014 compared to the first 9 months of 2013. Moissanite.com continues to grow rapidly, and saw our key operating metrics are up substantially.

Revenue, traffic and conversion were, and continue to trend, very positively. We are excited about the all-important fourth quarter holiday selling season.

Enhancements we've made to the site include an expansion of SKUs, a newly launched mobile platform and user experience, the addition of Amazon Checkout as a payment method as well as various other site performance and creative updates. Our customer files and data continues to grow both internally as well as with the social networks.

The site and traffic not only educate and increase awareness, but also gives our consumers the ability to purchase and experience our amazing gemstone. Lulu Avenue continues on its growth path. We're now represented in 47 states and Puerto Rico by our talented and enthusiastic team of style advisers.

Increases continue in the number of active style advisers, number of parties and productivity per party. Moissanite continues to be an important component of this direct selling model. Our e-commerce wholesale fulfillment business continues to expand our digital footprint.

As Randy mentioned, we've expanded a number of retailers, where our Forever Brilliant jewelry is available for purchase online. All have been technically integrated, forecasted and are ready for the holiday selling season. We have forecasted sales, inventory and staffing to service these businesses and customers flawlessly.

We believe these future partnerships will gain us visibility, awareness, and again, give more consumers the ability to experience our amazing gemstone. I'll now turn the call back over to Randy..

Thank you, Steve. This concludes our formal remarks this afternoon. And now we would like to open the call to answer a few questions that participants on the call may have. Operator, could you please open the floor for the Q&A session..

[Operator Instructions] And our first question comes from Alex Fuhrman from the Craig-Hallum Group..

A couple of things I was hoping to talk about with you guys. One was JTV. I know you mentioned that you have more hours planned here for the fourth quarter. That, that was a product that sold well for you this year. Did that segment -- or that customer contribute to the decline in your U.S.

revenue in the third quarter? Or was that growing year-over-year? And just trying to get a sense of the number of hours you have planned for the fourth quarter, is that up year-over-year from what you had in the fourth quarter last year? And how has that kind of trended throughout the year?.

I'll take that one, Alex. So JTV, for the year, thus far, through third quarter -- now remember, we record what we have shipped out the door to them. In other words, we can't take in what's in-the-house in orders. We can't report that as sales. So what we've shipped to them for year-to-date is pretty flat through third quarter.

Their hours for the fourth quarter are up significantly and the -- Charles is on this weekend, I'll give you an example. Charles is on this weekend between loose stones and jewelry for -- scheduled for 22 hours. He -- last year was -- and I'd have to look, but last year was somewhere around between 12 hours and 16 hours.

And he continues to meet or beat all of his goal. Now third -- when I say it was flat -- I'm sorry, third quarter was flat on a year-to-date basis thereof. And that -- again, that's what's been shipped out the door. I wish I could report the orders that are in-house but obviously, we don't report the orders..

Yes. No, no, of course -- is it possible just to get a sense of how much inventory of yours JTV had at any given point in time or right now? I'm just trying to get a sense as you've got 22 hours scheduled for the fourth quarter.

I mean does that -- would their in current inventory they hold of your product need to turn several times? I imagine that would -- there would need to be replenishment if you have a successful 22 hours this quarter?.

Alex, this is Kyle. As a general rule of thumb, we ship them for each show. So it's -- they obviously have some inventory, I assume, for their dot com and some other things, but it's generally more of a real-time basis within a few weeks of a show.

And that's what Randy was talking about, depending on the timing on when the shows are and when they want receipt, we have to work around that schedule..

Okay, great. And then if I could ask just the question on Lulu Avenue. Curious to -- I mean I guess you kind of lumped that in with the e-commerce business. Would imagine, obviously with that segment more than doubling, clearly, the Lulu Avenue part of it must have been very strong as well as the e-commerce.

Could you just kind of tell us a little bit more about how many hosts you have and kind of when -- a little bit more about the pipeline of people you have working the product right now and kind of the how do you feel about your host right now and how many of them are kind of at what stage in there.

Are they kind of in the training stage or are they already hosting parties? And then thinking about, I think, we've talked about before that typically moissanite sales are maybe 30%, 40% of what you sell through the Lulu Avenue channel.

I mean that seems like, for a lot of other brands, that could be really attractive to be within that other 70% of the assortment, given that it's a pretty captive audience and it's an upper income audience.

Are there other opportunities you've been exploring to work with other brands, maybe even external brands with top products that could even add a little fuel to the fire in that channel?.

Alex, this is Kyle. I'll take the first part of your question on some of the statistics and then I'll let Randy answer the last part. As we've said, our direct-to-consumer businesses, as a whole, have grown at very high levels.

Moissanite.com is still the majority of the revenue in that segment for us, but Lulu Avenue is growing at a faster rate, obviously, off of a smaller base. We had style advisers in 47 states in Puerto Rico. So the only states we don't have style advisers right now are New Hampshire, Wyoming and South Dakota.

As you mentioned, about 31% of the sales are moissanite in that business, and our average trunk show value is now over $700. So we don't disclose the number of style advisers, but we are continuing to add coverage and we're continuing growth with style advisers. And we're still selling a high percentage of our starter kits at $599.

So it's about 38% of our starter kits are being sold at $599. And I'll let Randy answer the question about additional products and things..

And Alex, you asked a lot of questions. But let me just kind of give you my view of Lulu Avenue because probably -- Lulu Avenue is probably the single most exciting thing that this company is doing in addition to our dot com. What we've learned and every month, every quarter, every year is a learning story for me.

And as you know, this is a growth story. But Lulu Avenue, these women are so passionate and they're looking for ways to get in business for themselves while they can continue their somewhat normalized lifestyle and their enthusiasm and their drive is beyond anything I've seen or experienced before.

The one thing -- the biggest validation that I've seen is consumers, women, love the moissanite jewel. They absolutely love the stone.

You can go out and read the reviews, whether you read it on Lulu, whether you read it on moissanite.com or even go to some of the other dot com websites and -- we couldn't make up this kind of reviews that they write out there. So when I look at Lulu -- and we are expanding their assortment outside of just one designer.

We've heard from them resoundingly that they have -- that their consumers that they're working with, is women selling to women for the most part, are looking for more robust pieces and a wider variety, especially in the moissanite jewelry. So we're working with teams of these women to help us expand and redesign the assortment.

And it's part of the reason that we're seeing increase in our average show value. I hope that answers some of your questions. If there's anything else, let me know what you're asking..

And the next question comes from Preston Folks [ph] with Prime Core [ph]..

I'm just given a little history here. I'm holding a prospectus, 17 years tomorrow on the 14th. You guys went public at C3 [ph], went public at $15. I think a hit over there once or twice over that 17-year period. But on the conference call, I don't see any -- I mean, you're going after mature market, you're missing out on the young people.

There's nothing in stores that I can send people to. I mean, totally a missed opportunity here. We have a patent that's expiring next year. You guys are just growing it online only. I checked out the Target thing and other websites, it's boring to me. But the thing is, what a missed opportunity.

Like instead of going like GoPro, where your so-called hired people from Calvin Klein, all these high-end people 20 years in the business, you're still just trying to struggle with the online thing and there's no pizzazz, no excitement. We don't even need the international market.

If you grew over here, that excitement, this market would take -- you only have less -- probably not even 1% of the market, so much you're leaving on the table and yet you're worried about overseas was bad. I don't get it.

I mean, you have experienced people, you hired and this is the best that this company is at this point, it's really disappointing to me as a person who has been in there ever since the start of it. And I don't see the excitement or pizzazz. You're going -- older women, they're excited about the moissanite.

But I don't know how you attract younger people to the product. I don't see your vision or how you're going to do that..

Preston, first off, I agree with everything you said. So traditional -- let me sum up what you're saying. Traditional retailers, the jewelry stores and outlets that normally sell traditionally diamonds have not historically, and are not embracing moissanite, especially our new Forever Brilliant.

However, we focus on going direct to consumers in order to capitalize on what we're seeing women love the product. And we're seeing that growth, huge growth, in our Moissanite.com and in our website -- I'm sorry, in Lulu Avenue and in our website, Moissanite.com.

The other piece that you'll see, if you'll to Etsy and you look at the designers, all you have to do is search moissanite, and you'll get a host of designers. They actually refer to it as Moissy. They kind of nicknamed it Moissy, and that's the younger millennial generation.

We've actually had those designers come down and spend time with us in our new building. And we're working on some new initiatives that are specifically going to target via -- what I call nontraditional retail channels to target that younger generation because I'm in absolute agreement with you. That's exactly where this company should be focused.

We've -- the international market is going to be what it's going to be. And our efforts in the U.S. can be a lot more productive, especially hooking up with the right marketplaces to get to that consumer. I wish I could share all of the initiatives that we have in place today, and I will as soon as they unfold and I'm able to share those.

And I think at that point, you'll -- hopefully, you'll have some renewed confidence in what we've been working on. This things don't happen overnight. It takes months and months. You work with a specific nontraditional retailer who has many outlets, it's 6 to 8 months just to get a test in their stores..

Okay. And this -- the patent, I don't hear anything about that. And the last thing I would just say is, I see young people come out with a GoPro or Tesla, a matter of 3 or 4 years. Thing's are taking off. This is something unique that I thought could have been marketed a lot different and what should have been taken off by now..

Yes. When you -- looking at the patent, again, this is something that in the markets in India, we don't have a patent. But looking at material that has surfaced in some of these markets, and we bought this material, it is nowhere near the quality of what Cree grows and we process into a gemstone.

And at this point, what we've been doing is also engraving our brand, the Forever Brilliant brand, on the material that we're putting out there on the stones in order to differentiate them so that when this generic product hits our market, no one confuses this sub-quality material for Charles & Colvard's Forever Brilliant.

I wish you could see the difference. I mean it is absolute night and day. The other piece that we can hang our hat on that they can't is, our stone is actually made here in the U.S.A. And they won't be able to say that. And that's another initiative that we're looking at real hard..

And the next question comes from Justin Ruiss from Sidoti..

I just had a question on the international piece. Just looking at the declines there.

Is there -- is it specifically due to the environment in how people are shopping or are there certain substitutes that people are going for in the international markets just comparatively to what you have to offer?.

Well, the -- and I'm just kind of do it in a sequence a little bit. Last year, we were impacted negatively with all the turmoil over the elections and everything in India. And then the Indian government imposed incremental duties and tariffs on specifically, jewelry-related product. And that is still in place.

We thought with the elections ending, that, that would be pulled back, but it wasn't. But in addition to that, we have seen some generic material in the marketplace over there. And working with our largest distributors, we've been able to obtain and look at that, assess it.

We've gone back to market over there with material to compete with what we're seeing. It gives us an opportunity to actually hone in our program before generics come into the U.S.

And I believe, Kyle, you'd have to correct me, for the third quarter I think our India sales were over third quarter last year?.

That's correct. For the third quarter, India sales actually increased..

So that's something we'll be applying as we see things pop up in various international markets. But international market as a whole, and I'm looking historically for the company as far back as you could look, has never been a major piece of our business..

Do you feel that it could be a larger piece just going forward? And just, again, with the competition that you see, is there a major price difference from your offering compared to theirs?.

There's not. Not where we're positioned. Where we positioned ourself today in the international market, we're delivering a better product for the same dollars. So -- and the choice is becoming pretty clear to the distributors over there because, like I say, the orders we got third quarter was an increase over the same period last year.

I really don't -- I think -- we're a $25 million, $29 million company, I really think we're better off, in terms of major focus, to focus our resources on opportunities here in the U.S. We have some really key initiatives in place and I'm much more excited about the U.S. market than I am the international market. We're not walking away from it.

And we're continuing to have representation over there, but we're going to let our distributors do the marketing in the international market..

And the next question comes from Jay Harris with Goldsmith & Harris..

Randy, at the beginning of the year, you had targets for converting portions of your inventory to cash. You're obviously running behind that.

Can you share with us what you think you'll end up with, December 31, in terms of an overall inventory reduction?.

Yes. And Kyle, correct me if I'm not right, we still feel -- we've said and we still feel that we'll be something around or a little less than $39 million in inventory. And we think our cash will be around -- or somewhere around $4 million, $5 million or something..

I think the challenge on the cash side, Jay, obviously given the lower billings we had in Q3, that will take it and make it a little more difficult to get to the $5 million we're targeting on cash. But I agree with Randy, we're going to -- we should drive our inventory down below -- $39 million or below.

And we expect that inventory to continue to be a positive source of cash, and we should go up from where we ended Q3..

And Jay, I would point out one other thing, Jay. Just so you look at reality, I would also point out that while our cash, second quarter to third quarter, was down roughly $700,000, we paid off an incremental $1.1 million of debt of our payables.

So it's really a net -- and you've got to look at the 2, we were net $400,000 increase if you look at the 2 together. And that's something we're very focused on..

I'm just looking at the total level of inventories.

Where do you think you'd be at the end of 2015?.

We're in that process right now that we're doing budgeting. We've met as a group and the individual pair -- we've had 3 distinct selling businesses, 2 of them are in a huge growth mode, Lulu Avenue and Moissanite.com.

And in our wholesale division, we've got some different initiatives that we've started working on earlier in the year that are starting to -- that we're feeling better about for 2015.

So I can tell you this, that our commitments for taking on raw material are well in line with what we can use and sell off inventory and reduce inventory based on where the projections are kind of looking..

I'd like to follow-up with you when you get a chance..

Sure..

And the next question comes from Rick Fetterman with Fetterman Investments..

I wondered, kind of expanding on the first question regarding what was going on with JVC. With all the update metrics that were presented in your prepared remarks, I wonder if you just kind of go over what happened.

Where were the shortfalls in the third quarter? It seems this was up, that was up, things are better and yet revenue, domestic revenues, were down 10%..

This is Kyle. I'll take a stab at that. So to be clear, our JTV business was flat in the third quarter. In the U.S. specifically, our U.S. distributors, our largest distributors, the business was down from Q3 of last year. Our U.S. distributor business through the first 6 months of the year had actually been up, but it declined in Q3.

Some of that is timing as they place orders. And some of that is just as they sell-through in the marketplace. So when we look at our large U.S.

distributors for the year through the first 9 months, they are slightly down year-over-year, while our direct-to-consumer business are growing at very high levels, but they're growing off a much smaller basis..

So, I mean, just so I understand it.

So the -- with the distributors, the sell-through, in all likelihood, was not what one would have hoped most recently? Is that a fair statement?.

Well I do know if it was -- it's sell-through or just -- again, it's back to timing of when they place the orders with us. So we are -- we continue to work with our distributors. As Randy mentioned earlier, we have several marketing plans and initiatives to do that.

Part of what we've done in our new website is try to show all the places where Charles & Colvard Moissanite can be purchased. So we're trying to facilitate that and give consumers more awareness of where they can buy the product as well as support our distributors. So we've always said that quarter-to-quarter can be a lot of variability.

And in the case of our U.S. distributors, that's what we saw this quarter. And it just so happened that it happened in the same quarter where we had a large international decline in our business..

Looking at -- I guess, expanding on retailers.

Is there anything going on with the brick-and-mortar retailers? Are Boscov's or Rogers & Holland or Ashcroft, has their selection expanded beyond the Survivor Collection? And is anything going on with Amazon?.

The Survivor Collection has been in those stores for about 6 weeks -- actively in their cases for about 6 weeks. Will they expand the selection, I don't know at this point. I know there's been some discussion about it. But we still have our sights on having the moissanite product in brick-and-mortar stores.

It may not be traditional jewelry stores, but we think we've got outlets where if we're successful, we'll absolutely target the women buyers that we're experiencing through Lulu and also through our dot com..

Is Amazon sort of history at this point?.

We wouldn't say it's history, we're in dialogue with them on a regular basis, looking at various ways and opportunities to leverage their platform. And obviously, to get moissanite out there in front of many more -- a couple more customers. So there is dialogue occurring, it's progressing, but not as fast as we would like..

And the next question comes from Charles Lane [ph], a private investor..

A quick question. Do you have a breakout with regard to the P&L for Moissanite.com and Lulu? And secondly, what is your forecast or break even point looking down the road? And I know you can't say a lot about forward-looking things, but the gut feel..

Chuck, well, you probably know we don't give forward-looking forecast, as you said, we can't comment on that. And our direct-to-consumer businesses, we report as one segment. So from a -- and when we file our 10-Q tomorrow morning, you'll be able to see that breakout. But I can give you a couple of numbers.

So our direct-to-consumer businesses for the year-to-date 2013 lost about $4 million. And year-to-date 2014, they've lost about $3.3 million at an operating level. So we're seeing -- in addition to revenue growth, we are seeing some improvement in -- or reduction in the amount of losses, and we expect that trend over the long term to continue.

We do think Moissanite.com in Q4 will tend to -- should land at a contribution margin level profitably or close to it based on that being the biggest quarter of the year. So it's trending in the right direction..

Well, investing in the future, but trending in the right direction. And I know you can't talk about the future, but the lines will cross someday, we hope..

I am even more optimistic than I was when we originally started down this road, that these lines are going to cross and at a future date, both of these businesses are going to be huge for Charles & Colvard..

Yes..

Well I -- when I talk about lines crossing, I'm talking about the total operation. And I understand that you're trending in the right direction as it pertains to 2 direct-to-consumer programs..

And actually, as there are no more questions at this present time, I would like to turn the call back over to Mr. McCullough for any closing comments..

Thank you, operator. Once again, I'd like to thank everyone for taking the time to participate in our call today. And most of all, thank our employees for all their hard work and continued dedication. That's it, operator, we're good..

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Have a nice day..