Joel Gay – CFO Tom Rooney – President & CEO.

George D'Angelo – Jefferies Patrick Jobin – Credit Suisse Cynthia Motz – Edison Investment Research Robert Smith – Center for Performance Investing.

Welcome to the Energy Recovery Q3 2014 Earnings Conference Call. (Operator Instructions). At this time, I would like to turn the conference over to Joel Gay. Please go ahead, sir..

Good morning, everyone. Welcome to the Energy Recovery's earnings conference call for the third quarter of 2014. My name is Joel Gay, CFO of Energy Recovery and I'm here today with our President and Chief Executive Officer, Tom Rooney.

In today's call, we will provide you with information about our financial performance in the third quarter of 2014 as well as provide an update on our growth strategy.

To begin, some of our comments and responses to questions may contain forward-looking statements about market trends, future revenue, growth expectations, cost structure, gross profit margins, new products and business strategy.

Such forward-looking statements are based on current expectations about future events and are subject to the Safe Harbor provisions in the U.S. Private Securities Litigation Reform Act.

Forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors that could cause actual results to differ materially from those discussed. A detailed discussion of these factors and uncertainties is contained in the reports that the company files with the U.S.

Securities and Exchange Commission. The company assumes no obligation to update any forward-looking statements made during the call, except as required by law. With that, let's open with an interpretation of the third quarter of 2014's financial results.

Beginning with the top line, net revenues of $5.3 million were largely in-line with management's expectations in the context of market lumpiness and project timing risk.

While this quarter's revenue performance represents a 10% increase over the prior year period, it also represents a 17% decline sequentially, that is to say as compared to the second quarter of 2014, both the current quarter and prior year lack mega project revenues and as such the aforementioned 10% increase over the third quarter of 2013 is attributable to higher OEM, aftermarket and oil and gas sales.

Specific to oil and gas sales, the company was able to discern revenue for the third quarter sequentially, again generated through rental income from an operating lease on an IsoGen unit in Saudi Arabia.

As it relates to the decline in revenues as compared to the second quarter of 2014 and our revenue performance in the current year generally, it is important to note that we continue to experience particularly impactful timing risk with a large mega project shipment that was scheduled to ship in the current quarter.

While we expect to recognize revenue against this shipment in the fourth quarter of this year, the risk of further delays specific to this project persist. Moving on to profitability, the most impactful variable was product mix, namely a decline in PX revenue as a percent of total net revenue.

Gross margins therefore declined to 44% from 60% in the prior year period. As compared to the prior year period, a PX product mix of 73%, the current mix of 44% represents a 29-point shift.

For consecutive quarters which is again to say as compared to the second quarter of 2014, there was also a shift in product mix away from PX devices towards pumps and TurboChargers with PX revenue as a percent of total net revenue declining by 19 points, from 63% to 44%.

While the prior year period did not contain mega projects revenue, the impact on gross margins due to the aforementioned large mega project shipment delay is noteworthy.

Generally speaking while increased OEM and aftermarket revenues somewhat tempered the margin decline from the prior year period, product mix was a primary determinant of gross margin. As we discuss our operating expenses, it is important to note both the effect on the current period, but to also understand what we anticipate in future periods.

Operating expenses as compared to the prior year quarter increased by $1 million to $7.8 million. The majority of the increase is due to higher research and development and sales and marketing expenses.

While decreased general and administrative expenses offset this increase slightly, the net increase of $1 million is the result of continuing activity to commercialize products in newly-identified markets of strategic interest as well as the further execution against the sales and marketing strategy for oil and gas.

To this end, we will continue to increase our sales and marketing expenditures to further gain market acceptance of our product portfolio throughout the oil and gas verticals of interest. However, we recognize that the commercialization of these products in this particular industry is not an easy task.

Our products have a compelling return on investment proposition to the end user. However, installing a new technology into a regimented and defined industry is not the path of least resistance. As with desalination, we believe that the compelling nature of our value proposition begets inevitability.

As a result of higher operating expenses, coupled with lower gross margins due to a shift in product mix, the company reported a net loss of $5.5 million or $0.11 per share as compared to a net loss of $3.9 million or $0.08 per share, in the prior year period.

As discussed in previous calls, the company's balance sheet and cash position remain strong.

In the nine months ending September 30, 2014, $1.6 million of net cash was consumed by operating activities while $1.5 million of cash was consumed by operating activities in the first quarter, the continued monetization of receivables, offset by an increase in inventory given delayed shipments and production for future demand, mitigated the impact of operating losses.

Notably, cash flows from operating activities in the current quarter were negatively impacted by $1.5 million relating to a previously-disclosed settlement with the former shareholders of Pump Engineering.

However, net cash flow in the current quarter improved by $2.1 million relating to the same matter, given the release of restricted cash held in escrow.

As of the third quarter of 2014, the net loss of $13.8 million included $5.6 million in non-cash expenses, the largest of which were depreciation and amortization of $3 million and share-based compensation of $1.6 million.

The company improved net cash flow performance by $3.8 million over the prior year nine-month period by producing $3 million in net cash flow.

Excluding current and non-current restricted cash of $5.4 million, the company reported unrestricted cash of $17.4 million, short term investments of $13.8 million and long term investments of $1.4 million, all of which represent a combined total of $32.6 million as of September 30, 2014.

In closing, I remain comfortable with the strength of our balance sheet which includes ample cash and no debt. Such will continue to serve as the framework through which we further achievement against our strategic plan. I would now like to turn it over to our President and CEO, Tom Rooney. Tom, please go ahead..

Thanks, Joel. Good morning, everyone. I would like to discuss our outlook in the coming months and also outline where Energy Recovery is today in terms of our ongoing growth initiatives.

As we've discussed with many of you in the past, we have sought methods of leveraging our industry leading technology and capital position, to both strengthen the markets where we lead and seek new applications for our technology. The global desalination market remains lumpy.

While we're encouraged by strong, continued sales in our OEM segment, the macroeconomic factors that Joel mentioned earlier are not abating at present thus it makes this market difficult to predict.

The majority of these projects originate in a diverse group of markets across the globe with the vast majority of our company's historical revenue being international. In last year's fourth quarter, we had a record period in desalination as a result of a number of factors.

We still feel that we have a strong pipeline of projects throughout several markets, but our challenge has and will continue to remain, predictability. We’ve the market share, the capacity and the best product in the industry, but we remain dependent on the global market.

Throughout 2014, we’ve continued to reinvest in our business through new industrial markets, where our fluid flow technology would provide compelling returns. Focusing on these markets will both provide the best use of our capital by maximizing the upside potential from our existing technology.

The premise is that the investments made in these markets may make time to develop, but the sales potential vastly exceeds what we can concurrently achieve in desalination and we have the operational leverage and proprietary technology to see the strategy through to fruition.

Examples of this are emerging fluid flow markets, such as oil and gas and ammonia, served with our IsoBoost and IsoGen products. Over the past year, we have provided insight as to the oil and gas opportunity, more specifically gas processing and the fruits of our sales and marking campaign in the form of proposal activity.

The $100 million plus in solicited proposals is an indication of the strength of our value proposition. One, it allows for significant energy savings as well as an increase in capacity utilization by improving the reliability, availability and maintainability of the plant.

While we did produce rental revenue from oil and gas during the period, we believe industry adoption remains nascent. Irrespective, we continue to further develop the technological and operational capabilities of the product portfolio while properly communicating the value proposition to many new potential clients.

Our products are unique and there is no competitor that can match the return on investment on Greenfield or retrofit opportunities that Energy Recovery provides. Before I conclude my remarks, let me touch briefly on the event that we’ve planned in December.

We alluded to this endeavor on our last call which will serve as a launch and entry into a new market for energy recovery. Of note, we’ve moved the date of this event to December 8 in New York but let me provide a brief background.

As part of the process in our oil and gas outreach in past quarters, we were fortunate to make considerable inroads with customers in the energy space. This allowed our company to understand other applications in large markets where our technology could best be suited, ramped up quickly and where the return for our customers was compelling.

We began to invest in a new initiative in 2013 and we gave some insight into this in our last call. This is a significant endeavor that Joel, myself and our entire company are tremendously excited about.

We're entering a new market and we will do so intelligently having learned how to establish ourselves as the market leader such as we have done in desalination and how to react when things do not progress as quickly as we would have imagined, such as we have done in oil and gas.

In closing, we feel very confident that the company is positioned to provide to its shareholders meaningful returns, generated by capitalizing on several exciting marketing opportunities at hand. With that, I think we will open it up for your questions.

Operator?.

(Operator Instructions). We will take our first question from Laurence Alexander with Jefferies..

This is actually George D'Angelo on for Laurence, just a broader question.

On a five year horizon where do you see the mix of product revenue coming from? How much from de-sal? How much oil and gas? And then how much from new opportunities?.

So five years from now, I think you would probably see less than a third of our business coming from desalination and 2/3rds or more of our business from industries other than desalination..

And then just with the oil and gas sales force, how far along would you guys say are you in building it out? How large do you see it becoming eventually?.

I believe we’ve seven dedicated people in oil and gas right now. We recently hired, in the last few months, we hired someone to lead oil and gas sales in China. We also, at the same time, hired someone in the Middle East. If I am not mistaken we’ve seven right now, we're actually actively recruiting an eighth.

As we build the business, we intend to sequentially and progressively build that sales force as well..

We will go next to David Rose with Wedbush Securities..

This is actually James calling in for David. Just wanted to start out with a question on inventory, compared to last year, I see that you guys have increased inventory levels. During last year, you had the utmost confidence that Carlsbad and a couple of our projects would ship in Q4 and it did.

This year, your comments suggest greater uncertainty in the de-salt market and slower-than-expected demand from the oil and gas market.

I was just curious as to why we're seeing an increase in inventory levels? Then following to that, if you can talk about reason for the increase in obsolete in inventory?.

Sure. In terms of inventory, there are a few causal factors to the increase over the prior year quarter and also sequentially. First of all, our shift in sales mix towards pumps and turbo will inflate inventory which is to say that our pumps and turbo charger products have a higher average unit cost, so that's one.

Two, I made mention of a large project that has been delayed for a few quarters now, so that is also sitting in inventory and inflating it. And then three, from an inventory-valuation standpoint, we're on a FIFO standard. So on a quarterly basis, we revalue our inventory based on our standard costs.

Given that, production is down as compared to the prior year. You’re going to capitalize a higher percentage of your overhead into inventory..

Okay. Following on that, a question on this quarter's product mix, obviously, the unfavorable mix negatively impacted the gross margins, but it seems like we're seeing lower volume of PX device sales. It looks like the lowest in three years or so.

If you could provide any color on the shift in the product mix? And then if you could touch upon gross margins going forward? I know you had talked about 60%, previously being the achievable and sustainable level, based on past two, three quarters of performance.

Is that something that you would reconsider and maybe reset your expectations for what gross margins will be?.

Let me answer the first question. Specific to what we're witnessing in our product. Our marketing mix, given the fact that we’ve yet to generate MP revenue will of course skew your product mix away from Pus towards pumps and turbo chargers.

As you compare this year versus the prior year period in which we did have MP revenue at this point in the year that is one of the primary causal factors. We’ve also seen, at least on a quarterly basis a shift away from PXs towards pumps and turbochargers within both our OEM and aftermarket sales channels.

In terms of what we see in the pipeline, we certainly would not submit that this is a permanent shift in product mix. We believe that the product mix will return to historically normal levels. As it relates to gross margins, in the high 50%s, low 60%s, we stand by that statement.

Given the proper amount of volume in which we can leverage our fixed costs, operating leverage we absolutely can achieve those gross margins and then some..

Okay. And lastly on oil and gas, I think last quarter you guys mentioned you had signed a new contract in oil and gas that you weren't able to publish any information on. Obviously, we're not seeing that in the revenues.

I was just curious what – if any status on that? If we expect to see any revenues coming out of that and any details you can provide? That would be helpful. Thank you..

Actually, I think what we said in the last call was that for the new market that we're going to be announcing on December 8th. We actually have signed a contract with our first client there. In that regard, that client was as yet unnamed.

The name of that client and the name of that industry and the name of that product will be front and center during our analyst event on December 8th..

What about on sales or revenues, is that something that we should expect in the near future or?.

In regards to?.

Would you say that is too far away?.

For oil and gas itself, yes. We intend to elaborate much more on that on the analyst event on December 8th..

We will go next to Patrick Jobin with Credit Suisse..

First question and then I have a few follow ups. But first question, just thinking about the event and the launch of this new technology maybe any sense on commercialization timing? With a contract in hand, revenue would be relatively around the corner, just how should we think about timing of revenue for this new product launch? Thanks..

Patrick, it is a radically new deployment of our technology. We signed a contract with our first client for that industry several months ago which includes both extensive trial periods and then I think it goes all the way out five years, in terms of commercial deployment.

It is slightly more complex than simply saying we signed a contract and revenues will come at a certain date. Obviously, we'll have a great deal more detail, that client, we think will even be in attendance on December 8th.

So as to give first-hand perspective on the strength of the value proposition and the likely industry trends that could come from that. There clearly will become revenue from this client, but there is a high collaboration going on between our firms right now and then that moves into field trials, early next year. We will have much more on that.

I wouldn't try to pin down revenue numbers quite yet..

It makes sense, potential five-year and a field-trial period. Last question is just more simple ones.

In Q4 would you anticipate any mega project revenue or is it too tough to tell at this stage? The second question was on oil and gas; do you think 2015 would have meaningful or material revenue beyond the rental revenue?.

I think, Joel, the first question was MPD revenue into the fourth quarter. I think Joel alluded to that in his comments when he said that we've got a significant MPD project that has been delayed now two quarters. Where we sit right now, we do think that that project will ship this quarter.

I think you can assume that since it has delayed already two quarters, it fits in the category of – we won't know until it goes out the door. To answer your question, yes, I think we expect MPD revenue in the fourth quarter. This is an industry where that kind of thing slips all the time, so we will have to wait and see.

And then meaningful revenue on oil and gas next year, I think where we stand right now is that we see a whole wall of client activity going on and proposal activity, that give us a very wide spectrum in terms of what potential revenue could come from oil and gas next year.

We're positioning for significant revenue in 2015, but really what we’ve accepted is that a significant run-up of revenue for us in oil and gas is inevitable. Is it going to happen in the first quarter, in the fourth quarter, is it going to happen in 2016? We're taking it one step at a time.

The word internally now is that this oil and gas industry and revenue there for us is inevitable.

The strength of our value proposition has gone up dramatically through some studies that are being done by some of our clients that will beget white papers and industry conferences so the level of attention on our products is going up dramatically, creating this inevitability.

Significant revenue in 2015? I would like to think so, but really what we're more focused on is moving significant numbers of projects into the pipeline into this inevitable future for us..

We will go next to Cynthia Motz with Edison Investment Research..

First just on the de-sal market and I know that, obviously, maybe the shift is moving away and it is hard to tell. Tom, can you give us any more color just in terms of why there are so many delays? Obviously, you said it not specific markets.

Is it approvals? Is it the costs in certain areas where are you? And then just following up on Patrick's and David's question, so most of the guidance is going to come at the meeting on December 8th to the extent we can get it, obviously. Just in the oil and gas marks are you more focused on the U.S.

or is it going to be – I know it is global but is it going to be – I guess the de-sal markets have been more global. Just curious if you can give any more information right now on that market? Thanks..

Your middle question was about guidance at the Analyst Day. You're right, we intend to provide as much information as possible on December 8th and we're obviously preparing to do so. In terms of the third part of your question, oil and gas is very global. The majority or a very large portion of the pipeline that we’ve is outside the United States.

We also have a number of projects inside North America and the United States, but we're addressing the oil and gas industry, right from the start as a global industry. I think we have proposals and clients on four or five continents that we're working with right now.

Obviously a bunch in the Middle East and Asia and North and South America, Europe and North Africa obviously, so very global, because Energy Recovery, through its desalination work is already very global with global sales force, it is not hard for us.

So, we are not starting in the United States and expanding overseas, we're right out of the gates, very international in that regard.

On the MPD and why things are, in desalination, why things are holding back, it is not so much that it is approvals and what not, it is that there have been a number of developments, geopolitically and economically around the world that seem to line up against, if you will, desalination. I will run through some of those.

Historically, the most potent geographic market for desalination in the world has been the Middle East. The Middle East, historically has been and even as we look out into the future. The Middle East has the most number and the most significant projects in desalination.

I probably don't have to explain what is going on in the Middle East right now whether it is the after effects of what happened in Libya a couple of years ago all the way through ISIL, the troubled areas throughout the Middle East.

So you've got the historically strongest part of our market is tied up in things that are far more important than desalination. You've got the northern part of the Mediterranean Sea which is also historically strong for us which would include countries like Spain.

Unfortunately, all of those southern European countries are experiencing very, very tough economic conditions, a lot of economic delays that works against us tremendously. And then you've got China which is a market that has tremendous upside potential for us.

China has seen significant GDP slowdown over the last three or four years and China has seen some political turmoil. In the wake of Bo Xilai and what not there is a real crunch in terms of political vetting pertaining to corruption.

Between the clamp down on corruption and the GDP slowdown, we have seen a significant lengthening and extension of this significant run-up coming from China and then you turn to India which is the next big market for desalination. It is all good there.

The Modi administration is the first major political shift in India in 60 years, very pro-business government coming into place, very pro-desalination by the way. Mr. Modi actually pushed desalination in the Gujarat province while he was the Provincial Leader.

We’ve huge expectations there, but a government as complex as India's has an incubation period before the new government is in its seat and is doing what it needs to do. Then you look at the U.S. market and the U.S. market is just the U.S. market.

California remains twisted in the wind, in terms of what it will do despite this raging drought in California. So I don't want to make it sound like excuse making, but when we sit and we look and we ask the same question, why does the world need so much water with desalination is really the primary method to get there, yet the industry is anemic.

Why is that? Then you look, sequentially, at war-torn areas in the Middle East and GDP slowdown in Southern Europe and China and political turnover in India you start to realize, wow, there are about four factors that we all see on the news every night that directly impact government's appetite to move forward with large CapEx projects.

How quickly will those things abate? I think anybody on the call can speculate on those. At the end of the day, desalination is a technology that has not fallen out of favor. There are certain major events that cause governments to slow down or stop moving these large projects forward.

When and as we see those turn over, I think you are going to see desalination come strong. Don't ask me when that is going to be. I just have to ride that same wave with everyone else. I would love to say we could impact that and drive demand. We simply can't..

It sounds like, though, Tom – I mean that is a lot of good color.

I was just curious, though, it sounds like are you not expecting those same geopolitical headwinds – obviously, you don't have a crystal ball, but with oil and gas you sound like you're taking your experience from de-sal market and approaching it may be in those markets a bit differently so maybe it is not quite as arduous? Would that be correct to say that?.

Yes, and a lot of the political headwinds that we described don't really have the same impact on how the oil and gas industry would receive our technology. Part of that is because the slowdown in all of those geographic areas that I referred to in de-sal is with regards to initiating new Greenfield desalination projects.

And by the way they are controlled by governments and what have you. In the case of oil and gas, the vast majority of our value proposition is going into existing facilities and making incremental improvements to existing facilities, so as to make them more profitable.

Now I can't say that that would happen in an area that is war-torn with regards to ISIL, but in China and everywhere well else, in the United States. A value proposition on economic return to a plant that is already existing is not going to see the same kind of headwinds.

By the way, the reduction in crude oil prices, a barrel of oil dropping from $100 to $80, one at first might think well now maybe the oil and gas industry is sick, well it is not. In fact, what it creates is a profit squeeze and so they have installed facilities and they simply need to be more profitable.

We've actually seen an increased interest in our technology because we help the oil and gas industry be more profitable. The irony there is that a slightly lower price of oil may actually have a slightly positive impact on us..

(Operator Instructions). We will go next to Robert Smith with Center for Performance Investing..

Most of my questions have been answered or spoken to.

Tom, can you just give us perhaps, a discussion or a little more color on the parameters of the value proposition in oil and gas, perhaps in payback periods and?.

I will give you a two stage answer to that, Robert. When we launched into the oil and gas industry 3.5 years ago, we had what I would call the simple or most obvious value proposition which was someone would – and I will give you literal numbers here.

Someone would purchase one of our technologies, one of our IsoBoost technologies for $3 million install it and then get about $1.4 to $1.5 million per year of energy savings. The device goes in. It keeps energy in the system. Therefore, you don't have to – you can take some pumps offline and so on, two-year payback period.

In point of fact, we would see a spectrum of 1 to 3 year payback with the scale of the device dictating the economic payback. We maneuvered to really get to a price point where we could achieve a three-year payback in the worst case situation, that's how we’ve been propositioning or positioning it to our clients.

Obviously, most CFOs would accept a 6 to 7 year payback period if it was completely and correctly risk adjusted.

What we recognized that coming in we're asking people to consider a new piece of complex technology in their plant and that they would have a certain risk aversion and that risk aversion would cause us to have to give them a stronger economic value proposition, down around three-year payback so as to enable them to consider it risk adjusted.

What we found in the last six months or so frankly, in collaboration with Aramco is that the value proposition, being the 2 to 3 year economic payback based on energy savings, is just the starting point.

As we started to study the risk of deploying our technology in the plant, it became obvious to Aramco and it became obvious to us that we had it backwards that we were actually de-risking the plant.

So adding our piece of technology into the plant was not adding to risk of the plant, it was actually de-risking the plant, not in a subtle way, but very substantially. How that works is that the most – this is critical and we're going to get into this in great detail at the analyst day.

It is very critical because it has now vastly accelerated the interest level in our technologies. What it amounts to is that the current plant as they operate, are at very high risk for plant downtime because of the current pumps that they use. The pumps are great, but pumps tend to break down. They have a known breakdown cycle.

What happens when we put our technology in, the plant has say three pumps, they actually have the ability to de-energize two of the three pumps which reduces 2/3rds of the maintenance on the plant but it also de-risks the plant. In place of those two very fragile pumps, we put our technology which has a very high known uptime, 99.9% something uptime.

This risk arbitrage that they see has significant uptime. Right now, through third party analysis using Aramco data plus our data, Aramco and specifically a key individual at Aramco, is positioning to tender a white paper next year, referring to this as a game changing technology shift that actually de-risks plants.

Risks in an oil and gas plant are significant.

That same $3 million sale which previously only generated $1.5 million per year on a two-year ROI is now being calibrated as a $4 million per year payback on a $3 million installation which is to say we're down around a nine-month payback once the de-risking of the plant has been calibrated using the client's own data.

So this is very, very exciting for us. It is born of third party data, third party analysis, white papers are going to be published and presented. This really changes everything for us. We're pivoting now on that value proposition. That value proposition as I say, was co-produced with one of our clients and ourselves.

It is appearing that our value proposition is significant and should create. What we're referring to as the inevitability of our products, that may be a mouthful, but that is pretty exciting stuff for us. It has really evolved over the last six months..

So earlier in response to a query about the long term five-year picture for the company, you said that 2/3rds of the business would be away from de-sal. I just want to know, in light upon the new area which you also said that you would be in perhaps sealed trials up to five years.

So the first mover essentially would still be in the hopper so to speak five years out.

Are you speaking about 2/3rds of the business in oil and gas as opposed to anything from the new area?.

Actually let me clarify. I think it might have been Patrick that may have, Patrick Jobin may have misinterpreted what I said. We're not into five years of trials on this new technology. We will commence field trials in the first quarter. We fully expect that the field trials should last much less than a year, it could be six months.

But our agreement, our contract with our first client contemplates commercial sales all the way out to five years. And so assuming that the field trials go well, we could be and it's still early at this stage, but we could be seeing revenue from that new vector late next year, early 2016.

Speculating on what the shift or percentage is between desalination and other stuff five years out is some very broad-brush speculation. I would have to try to figure in my head where de-sal will be in five years. I'm having a hard time figuring out where de-sal is in five months and then the advent of a number of new exciting industries.

So desalination is going to be 1/3rd or less of our business and I wouldn't try to build a model on where we're headed in terms of that 1/3rd, 2/3rds ratio five years from now. I think if we're and we're dedicated to being, successful in all of these markets outside of desalination, it could be 90:10. It could be 95:5 or it could be 1/3rd, 2/3rds.

There is a lot of variables at play here and over a five-year period it will be interesting to see how it all plays out. But the company is very clearly – has already moved away from being a pure desalination company.

By the way, I would like to think that had we not made the decision 3.5 years ago to expand beyond desalination, our options would be pretty rough right now. And so the future now looks very bright and the decision that we made 3.5 years ago to diversify, obviously is paying huge dividends for us..

Thanks for that clarity. I look forward to joining you on the 8th..

Absolutely, that looks like the end of our call. So we will wrap up the call now and I thank everybody. Certainly, look forward to seeing you a lot on the Analyst Day on December 8 in New York City. Obviously, you should be looking forward to that as well. Thanks, everyone..

And that concludes today's conference. We thank you for your participation..