Todd Kehrli - MKR Group Ashu Roy - Chairman and CEO Eric Smit - CFO.

Jeff Van Rhee - Craig-Hallum Mark Schappel - Benchmark Jon Hickman - Ladenburg.

Good day and welcome to the eGain Fiscal 2016 Fourth Quarter and Full Year Financial Results Conference Call. Today's conference is being recorded. At this time I would like to turn the conference over to Mr. Todd Kerhli of MKR Group. Please go ahead, sir..

Thank you, operator, and good afternoon everyone, and thank you for joining us today for eGain's fiscal 2016 fourth quarter and full year financial results conference call. Please note that this call is being recorded and will be available for replay on the Investor Relations section of our website at www.egain.com.

Before we begin, I'd like to remind all listeners that this conference call contains forward-looking statements within the meaning of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

These forward-looking statements include, among other matters, our belief that we are seeing and we'll continue to see the benefits of the Company's transition to a cloud-based business and will continue to see success in implementing a land-and-expand sales model, and that the enterprise market is increasingly preferring our broad and deep customer engagement suite delivered with the security in cloud.

The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions, if any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the Company's results could differ materially from the results expressed or implied by the forward-looking statements we made.

The risks and uncertainties referred to include but are not limited to our ability to capitalize on customer engagement, the success of our organizational changes, risks that are hybrid revenue model and lengthy sales cycles may negatively impact our operating results, risks related to our reliance on a relatively small number of customers for a substantial portion of our revenue, our ability to compete successfully and manage growth, our ability to develop and expand strategic and third-party distribution channels, risks associated with new product releases, risks related to our international operations, our ability to invest resources to improve our products and continue to innovate, and other risks detailed from time to time in eGain's filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K and currently reports on Form 10-Q which can be accessed on the Securities and Exchange website at www.sec.gov.

These forward-looking statements are based on current expectations and speak only as of today's date. The Company assumes no obligation to update these forward-looking statements.

On today's call, we will refer to adjusted EBITDA, which is a non-GAAP financial measure that is defined as net income adjusted for the impact of purchase accounting adjustments to deferred revenue related to acquisitions, depreciation and amortization, stock-based compensation expense, interest expense, net income tax, amortization of acquired intangibles, and acquisition-related expenses.

Non-GAAP results are presented for supplemental information purposes only and should not be considered a substitute for financial information presented in accordance with generally-accepted accounting principles.

We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and comparing the Company's financial measures with other software companies who present similar non-GAAP financial measures to investors.

With me today are Ashu Roy, eGain's Chairman and Chief Executive Officer, and Eric Smit, Chief Financial Officer. To begin our discussion I'll turn the call over to Ashu. Please go ahead..

customer service, contact center and customer experience. And finally, the geographic focus is something that Joe Brown, who's our Head of Worldwide Sales now, he has put together and working well.

He's pulling back from some of the disparate geographies that we were in earlier and turn them into more of a partner-oriented model and focus on tier 1 markets which is North America and U.K., and then work with partners in Western Europe. And everything else is opportunistic at this point.

That's the focus that we have taken over the last nine months and we continue to drive forward. The three channels to market that we have, again just quickly reiterating that, is we used to, up until December of last year, calendar year, used to have a territory-based model.

And that meant the same sales rep would handle new logo acquisition, existing customers and partner sales, all three in that territory. We have reorganized that into the land-and-expand model. The expand team takes care of all existing customers.

The land team has two dedicated teams, one for direct sales and the other for partner sales, and they are separate and focused. The partner group does not sell direct and the direct team does not sell partner. The location of it they'll work together and jointly [inaudible].

And that clarity has created better sales productivity and given us more efficiencies. If you look at the initiatives underpinning the new sales organization, the land group, the expand group and the cloud lift, and just want to talk briefly about the cloud lift.

This is an area where we have continued to focus on getting our on-premise customers to the cloud and we, as I mentioned earlier, with our financial services customers, we're starting to see some of the big on-premise clients moving into the cloud in the verticals that in the past had been somewhat resistant to the cloud, and that's the change for us, and we continue to promote that aggressively.

What I want to do next is give you a quick snapshot, you know, five minutes of the kind of customer successes that we are seeing out there with eGain solutions.

The two that I'm going to talk through and very briefly, one is Everything Everywhere, which is now a division of British Telecom, because they were bought by British Telecom recently, and the other is HMRC, which is the tax authority of tax authority of U.K.

And both of them, senior people from both those organizations presented at our recently, not so recent, but in March of this year, we had our digital day in London, which is a customer event in Europe, and these two presentations were at that event.

What you will find, as I go through this, is a quick view into what makes our proposition so compelling and valuable to large organizations like EE which has deployed our solution to 10,000 contact center agents and 500 retail stores.

If you start with what challenges they faced, and this is by the way straight slides coming from their presentation and you can find this presentation and the video with their words and their perspective on our eGain YouTube channel, but the two challenges that they faced was variation and performance across agents and teams, 10,000 agents, and then different knowledge too of different sources of truths.

They decided to go with eGain. This was a couple of years ago, actually three years ago, for the product capability and what they mention here? I just want to show you the way they approach this problem and increasingly we are finding businesses approaching process automation in the contact center.

When we're talking about conversational automation, we're not talking about workflow automation.

So they were inspired by the National Health Service of U.K., which is the healthcare organization, the government healthcare organization in the U.K., and they took it very seriously, saying that the way we instruct our associates to speak with customers has to be precise, has to be usable, and has to be correct, and we cannot afford to get it wrong.

So they called the solution, internally, they called it Albert. Some of the key features that they felt helped them achieve the kind of benefits that I'll show you in a second. The capability, our AI capability that we sell it as a guided health, the idea that agents can be guided through conversations using our AI technology.

So this was just a quick view into the front page of the agent portal, 10,000 agents at EE are using every day. And what you notice here is two things. One, every agent has the ability to handle every type of call.

And that revolution of the idea, for those of us who have been in this business, where a lot of time and money is spent trying to route and trying to workforce optimize based on the type of questions that are coming in from customers.

It turns out, with a guided health solution like eGain and the kind of investment that Everything Everywhere has made in it, they don't need to do that sort of routing anymore. Every agent can handle every type of inquiry using this guidance.

The other thing you'll notice here is that all the customer-related information that typically is spread across the entire screen on what you would consider as classic CRM screen is sitting in the right-hand column, in that white right-hand column, and that's the amount of real estate that they feel is necessary to get the customer context.

The rest of it is focused on solving the customer problem. And this is the benefit that they saw. In our opinion, it's transformational and they feel the same way. If you look at the benefits they have seen, their FCR, which is first contact resolution, is up from 62% to 85%. Their NPF scores improved by 20%.

Their training times are down almost 40%, 45%. And the speed to competency has improved 2x. If you look at those sorts of metrics, that kind of gives you an idea of the scale and the ROI that our solutions generate. And you can see how most of our customers that we have today, we have the opportunity to take them down this path.

This customer has obviously gone to a level that is strategic and transformational. And we have the opportunity with all our customers or most of our customers to take them down this path. And this customer is a seven-figure customer for us on an IRR basis. Let me talk to you briefly about a more recent customer which is HMRC.

And the person who presented at our event was the Chief Digital and Information Officer at HMRC. And I will not go through the size and scale of the organization. You can imagine it's a very large organization, clearly. What is interesting is the journey that they have taken on with us.

And you see the capabilities that they're looking to deliver, not just the telephone and the face-to-face, which are just like two circles, but everything [inaudible] which is where we come in. And they have already implemented the web chat and virtual assistant from eGain. And their teams have excellent results from that.

You see that they train about 600 staff members on it last year in their busy season. And they got some results that gave them a lot of confidence and values in this digital engagement model.

And now they're looking to launch the next set of digital engagement capabilities from eGain, first being [ph] Cobrowse after this, and which we are in the process of going live, and then secure messaging, so, to be able to do proactive digital communication in a secure way with all their taxpayers.

The shift that they have seen in terms of the value they've been able to show is remarkable. That I hope gives you an idea of two quick customer examples of the kind of benefits that we are delivering to our customers. And the reason I chose these two is just that this is in their words, this is not us talking about the benefits.

These are slides coming from them, and I thought that would be helpful for our investors to see the value. The next thing I want to talk about briefly is a quick example of a try-and-buy. And a try-and-buy, which I'll just rush through here so you'll see the value, this is for a customer called Express Gifts that we at that time was a prospect.

They were looking to deploy knowledge in a self-service mode. And they're a pretty large outfit. They're a billion pounds a year business, online and catalog shopping. And they have quite a large basket size, about $200 or so, depending on the value of the pound on any given day.

But what's interesting about the stat is that they have an 80% contact rate for order. Now if you think about your retail operation, every time someone buys, chances are, 8 out of 10 times, they will call in or they'll engage on some service-related inquiry after the order. In a thin-margin business, that's a kiss of death.

And so their focus when we went to them and they wanted to help was they want to bring down the contact rate per order. That was the number one goal.

And so what we did was we implemented our try-and-buy, the program that we've talked about, and we implemented a widget for knowledge that would intercept the request to contact and provide the right sort of knowledge to try to answer the question of the customer without assisted contact. Therefore, no escalation was the metric of success.

And in our environment, with our Journey Analytics tool that we have now developed, this is something that came to us through the Exony acquisition and then we combined the technology with our eGain context and now we have this great Journey Analytics capability.

We're able to look at how many people are trying to contact the customer on the website, how many of them get deflected by the knowledge intervention, and how many of them choose to continue to contact or go away, which the assumption being that they have found the answer? And what we found as we ran that try-and-buy over five weeks is that the reduction in assisted contacts per order was more than 57%.

That's the kind of value that we're able to show and the proof we are able to show in a try-and-buy in the customer's environment before the customer makes a decision to go with us. And that's the kind of compelling proposition that we see giving us the edge in the market nowadays.

So with that, I'm going to pause and hand over the call to Eric Smit, our Chief Financial Officer, for more commentary on the financials..

Thank you, Ashu, and thanks for joining us today. Before I begin my prepared remarks, I'd like to note the numbers I'll be sharing are non-GAAP unless otherwise noted. Included with the press release is a supplemental table that provides a reconciliation of the non-GAAP to GAAP numbers.

I'll start by reviewing our ACV and booking metrics for the quarter and fiscal year then go into details of our financial results. Our new subscription ACV for the quarter was $3.4 million, up 76% year over year and 93% in constant currency.

For the fiscal year, our new subscription ACV was $7.7 million, up 113% year over year and 124% in constant currency. Our total subscription ACV at the end of the year was $25.4 million, up 10% year over year and 17% in constant currency.

And our total subscription and support revenue ACV at the end of the fiscal year was $43.5 million, up 1% year over year and 9% in constant currency.

We continue to provide the gross bookings metric, which, remind you, that this is a total contract value number that includes renewals, comparisons against prior periods are not often relevant due to the timing of multiyear renewals and durations of contract signs, which may vary from one to five years.

Gross bookings or revenue plus change in deferred for the fourth quarter was $26.9 million, up 26% year over year and up 42% in constant currency. For the fiscal year, bookings were $73.9 million, compared to $78.5 million in fiscal 2015. The foreign currency impact on gross bookings for the year was $5.2 million.

Backlog as of June 30, 2016, or deferred revenue plus unbilled and uncollected, was $46.8 million, compared to $42.3 million at the end of the fourth quarter last year. Now turning to our revenue, total revenue for the fourth quarter was $17.6 million, compared to $17.1 million in the comparable year-ago quarter.

For the fiscal year, total revenue was $69.5 million, compared to $76.3 million in fiscal year 2015. The foreign currency impact on total revenue was a net decrease of $846,000 for the quarter and $2.1 million for the year.

Our subscription and support revenue for the fourth quarter was $10.8 million, compared to $10.1 million in the comparable year-ago quarter. For the fiscal year, subscription and support revenue was $42.9 million, up slightly from $42.7 million in fiscal year 2015.

License revenue for the fourth quarter was $3.8 million, compared to $2.8 million in the comparable year-ago quarter. For the fiscal year, license revenue was $14.5 million, down from $18.3 million in fiscal year 2015.

This again is consistent with our transition to the cloud where we are now only offering perpetual licenses through the Cisco channel and to existing on-premise customers. Professional services revenue for the fourth quarter was $3 million, down from $4.2 million in the comparable year-ago quarter.

For the fiscal year, professional services revenue was $12.1 million, down from $15.3 million in fiscal year 2015.

Again this is consistent with our strategic direction as Ashu had indicated or mentioned where we've made these improvements to our products that has simplified our deployment process resulting in the reduction in the time and cost for average implementation projects.

And we've made adjustments to our peers organization to align with these changes, as evidenced by a margin improvement that I'll get to later on in the call.

Now, looking at our gross profit and gross margins, gross profits for the fourth quarter was $12.6 million or a gross margin of 71%, compared to a gross profit of $11.3 million or a gross margin of 66% in the comparable year-ago quarter.

If you look at the breakout of gross margin by revenue type, subscription and support revenue gross margin for the quarter was 75%, unchanged from the comparable year-ago quarter. And professional services gross margin was 21% for the quarter, compared to 22% in the comparable year-ago quarter.

For the fiscal year, gross profit was $47.8 million or a gross margin of 69%, compared to a gross profit of $49.9 million or a gross margin of 65% for the same period last year. Subscription and support revenue gross margin was 75%, compared to 76% last year.

And professional services gross margin for the fiscal year was 11%, compared to a negative 4% last year. Now turning to our operations. Operating costs for the fourth quarter came in at $10.9 million, a 6% decrease from $11.5 million in the comparable year-ago quarter.

For the fiscal year, total operating costs were $46.6 million, a 9% decrease from $51.4 million in the prior year. Adjusted EBITDA for the quarter was $1.9 million or $0.07 per share, compared to adjusted EBITDA loss of $307,000 or $0.01 per share for the fourth quarter of fiscal 2015.

For the fiscal year, adjusted EBITDA was $1.9 million, compared to a loss of $1.4 million or $0.05 per share for the fiscal year 2015. By streamlining our business operations, we've been able to deliver this improvement to our adjusted EBITDA even while revenues have declined 9%.

GAAP net income for the fourth quarter was $1.4 million or $0.05 per share, which included a $1.5 million income tax benefit, compared to a net loss of $2.9 million or a loss of $0.11 per share in the comparable year-ago quarter.

For the fiscal year, net loss was $6.2 million or a loss of $0.23 per share compared to a net loss of $12.4 million or a loss of $0.47 per share in the fiscal year 2015. Now, turning to our balance sheet and cash flows. Cash and cash equivalents was $11.8 million as of June 30, 2016, compared to $8.7 million as of June 30, 2015.

Our net debt position at the end of year was $9.8 million, compared to a net debt position of $10.9 million at the end of fiscal year 2015. Cash flow from operations for the quarter was $2.2 million, compared to cash flow used in operations of $3.6 million in the comparable year-ago quarter.

And cash flow operations for the fiscal year was $1.9 million, compared to cash used in operations of $10.5 million last year. Total net accounts receivable was $11.9 million at June 30, 2016, compared to $13.1 million at June 30, 2015. And DSOs for the fourth quarter were 61 days, compared to 69 days from the comparable year-ago quarter.

Total revenue, which includes both deferred revenue on a balance sheet of $15.7 million and unbilled deferred revenue that remains off balance sheet of $31.1 million, was $46.8 million as of June 30, 2016, compared to $42.3 million at June 30, 2015. So in summary, we are pleased with our progress in fiscal year 2016.

We believe we are now more than halfway through the transition.

Our focus on alignment of costs and cash flow during this business transformation is yielding positive results as evidenced by the significant improvement to our cash flow from operations in fiscal year 2016 and almost $12 million improvement compared to last fiscal year, and our improved adjusted EBITDA margins from a negative 2% in fiscal year 2015 to a positive 3% in fiscal year 2016.

I'll now hand the call back to Ashu for his closing remarks and some outlooks on our fiscal year 2017..

Thank you. Thank you very much, Eric. Let's look at some of the things that we feel we will be able to accomplish and we're targeting for fiscal 2017. Number one, our new subscription bookings should continue to grow, compared to fiscal 2016, and we think that we will be able to have a majority of our new bookings from subscriptions in fiscal 2017.

If you recall, we did 44% of our total booking - new bookings were subscription in fiscal 2016. Looking at revenue, it's likely to be flat year over year in constant currency terms. Three reasons. One, the perpetual license revenue is likely going to be down year over year as we mix shift towards more subscription sales.

Our services revenue is likely to be flat because we want to continue to drive automation and pass on the efficiency benefits to customers, and we think that's the right way for us to drive our business and client success.

And then finally, the subscription and support revenue is going to be impacted by a significant reduction of about $5 million ACV with one client, and this reduction is going to be effective in January of 2017. So we are going to experience roughly half of that impact in fiscal 2017.

And so all these three things put together is going to be a result that we think the revenue will be roughly flat year over year.

But equally importantly, we continue to believe that, in this transition period, we must run a positive cash flow business from operations, and that's something we will attempt to do and we believe we will be able to do in fiscal 2017.

And the reason we are not setting targets on the profitability or the EBITDA numbers at this time is we just feel that we are at an inflection point in terms of starting to reinvest in our front-end sales and marketing.

We feel that we're still refining the sales productivity and the sales model and we want to have the flexibility that we can turn on the gas sometime in - through this fiscal year as we see the productivity level at a point where we are comfortable [inaudible] from thereon. That ends our prepared remarks. I'll open up the line for questions.

Operator?.

Thank you. [Operator Instructions] We'll take our first question from Jeff Van Rhee with Craig-Hallum..

Great. Thank you. Thanks for taking the question. So, a few questions for you guys. First, I guess, the cloud, in the guidance you just gave for 2017 saying it's going to be over half, obviously fairly aggressive transition to cloud 2015 to 2016. We're now at 44%, so, certainly 50% isn't much of a stretch here.

Can you give us a little better sense of where you think that might end up even if it sits within a range? You had been on obviously a very aggressive transition that suggests a little slower transition. Just want to be clear there..

Yeah, that's a good question, Jeff. Thanks. So we believe that we'll be able to get to better numbers than that, Jeff. Because if you look at where we are now selling, all our direct sales is cloud-based except for some, like a handful of existing customers where we're still selling add-ons in the on-prem world.

And then the only place where we are looking at the perpetual model still is the fiscal channel. So I think the number is going to be north of that 50% number, and perhaps as we get more clarity through the quarters, we can start to up that guidance..

I mean, would 60 be a shock? I mean, is that reasonable but -- still early but reasonable, or how would you?.

It's achievable but that's not the guidance we are putting out right now..

Okay. Professional services in the guide is flat. It's obviously come down considerably and with the heavier license install that obviously pulled a lot more PS with it.

So, I guess, with license being expected to be down, and the commentary about the cloud installs just themselves requiring less PS? I'm somewhat surprised I guess that you're looking for that to be flat. I would have thought it would be down as well.

So, can you just fill in the gaps there?.

That's a good point, yeah. So, two things there. One is, I think the volume of business we are handling is growing in terms of the number of installs and number of customers, number of new logos. That's one countervailing factor. And the other is that we are starting to play with early days so we are not really talking too much about it yet.

We're starting to play with the notion of managed services for some of these on-prem customers so that we can wrap a layer of ongoing professional services to make them much more successful..

Okay. You mentioned a few financial services customers you had to migrate.

If you move somebody from the premise model to the subscription world, how does the annual maintenance revenue stream for premise customer compared to an annual subscription revenue stream for that same customer roughly?.

Okay. Rough number is, if someone was paying us $100 of annual support, they would pay a total of $200 rough every year, which would include that support, et cetera, everything now wrapped into the subscription model..

Yeah, got it. Okay. And then just a couple others. Any color you can provide on understanding the overall bookings number, it has got its flaws, we've now got a new cloud ACV number, we've got an overall cloud ACV number.

Within those three metrics, can you give us a little better sense of how you're thinking about those in dollars absolute growth trends? Any incremental color there would be great..

You want to talk about that, Eric?.

So, Jeff, maybe if you can elaborate a little bit more on that, just from a, are you talking about absolute dollars terms, is that --?.

Yeah, just how you're thinking about, say, cloud ACV growth, you know, as we get to, say, the end of fiscal 2017, you know, versus 2016, or the new cloud bookings numbers. I mean, just a little better semblance of how you're thinking about those two would be helpful..

So I think at the moment, I think to Ashu's point, the -- if you look at the current levels of investment that we have in sales and marketing, we're striving towards, at this stage, increasing the productivity to a level, to a point where we start increasing the investment maybe towards the second half of the year.

So to that extent, you know, again we expect this number to grow, but at this point aren't looking to provide a specific number to what that is, because part of that's going to be a function of how much do we look to invest in this business to maybe accelerate that growth in the back half of the year..

Okay. Then just one last one to follow on to that, sales capacity.

Where are you in headcount now, how many of those are, say, better than two years of tenure and how are you budgeting for 2017?.

So we ended up the -- so we have, and I'm giving you rough numbers right now because there is flux going on, but we have roughly 30 quota-carrying reps right now. That number is somewhat fluctuating between 30 and 32. And our goal is to, as Eric said, get the productivity working well and then to scale from there. So that's kind of where we are now.

My expectation is that the first two quarters of fiscal 2017, we'll probably maintain the current level of the run rate of Q4 sales and marketing, is where we leap for the first two quarters, and then we think that we would have the opportunity to scale and invest more on sales and marketing in the third and fourth quarters..

And just within those, what percent of those 30 reps now have a couple years of tenure?.

Roughly 50% now..

Okay. Okay, I'll let somebody else jump on. Thank you..

Okay. Thanks..

[Operator Instructions] We'll hear next from Mark Schappel with Benchmark..

Hi, good evening. Thanks for taking my question. Ash, starting with you. In your prepared remarks I believe you mentioned that you expect a $5 million reduction in ACV in January from a certain customer. Just wondering if you could just go into a little more detail on that..

Sure. So this is a customer who is choosing to go the other route, in other words, go from cloud back to on-premise. We don't have any other customer who's gone back in the last several years but this is a big customer that we work with.

And they'll still continue to use our products on premise, but we will be giving up on the cloud part of the business. And they'll also be reducing the level of use that they have of our products when they go back into the on-premise model..

Okay, thank you. That's helpful. And then if I recall correctly, about a year or so ago, I think turnover in the sales force, let's just say, was above average or much higher than normal.

I was wondering if you could just speak to the stability of the sales force that you've seen in the last, you know, quarter or two and maybe some of the changes that you're making there..

Sure. So a couple of things I'll comment. One is that I think the reorganization took some tme to settle down and I think we are at least through the first wave of change and organization is in place in terms of the new direct channel and expand teams. That part is good.

I do believe that we will and you will continue to look at performance-based changes. But at this time we feel that this level of performance is sort of much better than the way we were six months ago and this is our target for the next six months.

So I guess what I'm saying is that we will continue to have some change in the sales organization over the next six to nine months..

Right. And then one last question here, on last quarter's call I believe you mentioned -- or spent some time going through the relatively new Avaya partnership.

And I know it's early days, but I was wondering if you've seen any traction yet there, or maybe [inaudible]?.

We are working on it, we're excited about it, but we don't have results to share yet. But it's an area that we see as an opportunity but we don't have results to share..

Great. Thank you. That's all for me..

[Operator Instructions] We will take our next question from Jon Hickman with Ladenburg..

Hi. Can you hear me okay? You made a comment about you felt your halfway through your transition to the cloud.

Can you tell me like what are you basing that on? Is it customer percentage or revenue percentage or what?.

My way of looking at it is, once we get to that 80% of our bookings coming from cloud, I would say that the business would substantially operate like a cloud business. And that's how I'm thinking of the milestone..

Okay. Okay. So I have another question with you about the $5 million.

Is that going to all hit in the January quarter?.

No. It -- so, roughly, so for the fiscal year, it's going to be half of that, because it's -- the reduction will take effect in January, middle of January, and therefore the 1.25, roughly 1.25 million in Q3 and 1.25 million in Q4..

Okay. Thank you. That's it for me..

Sure..

[Operator Instructions] It appears there are no further questions at this time. I will turn the call now back to the eGain management for closing remarks..

Thank you all for listening in to our end-of-year conference call, and we look forward to updating you. Just as a reminder, we are hosting our North America Digital Day in Chicago on October 11. Details are on our website, egain.com.

We would love to have you all come in and see what we have to talk about in terms of new innovation and customer successes and a great opportunity to learn about what we're doing with clients and how businesses are using our solutions. So I hope to see some of you at that event. Thank you..

This does conclude today's conference. We thank you for your participation. You may now disconnect..