Dale Messick - Chief Financial Officer My Chung - President and Chief Executive Officer.

Gregg Hillman - First Wilshire Securities Tim Savageaux - Northland Capital Markets Jim Kennedy - Marathon Capital Management.

Good day, ladies and gentlemen, and welcome to the Q1 2017 Luna Innovations Incorporated earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

[Operator Instructions] I would now like to turn the call over to Dale Messick, Chief Financial Officer. Please go ahead..

Good afternoon and thank you for joining us today as we review our operations and results for the first quarter of 2017. A recording of this conference call will subsequently be posted on our website.

Before we proceed with our presentation today, let me remind each of you that statements made in this conference call as well as in our public filings, releases and websites, which are not historical facts, may be forward-looking statements that involve risk and uncertainties and are subject to changes at any time including, but not limited to, statements about our expectations regarding future operating results or the ongoing prospects of the company.

We caution investors that any forward-looking statements made by us are management's beliefs based on currently available information and should not be taken as a guarantee of future results or performance. Actual results may differ materially as a result of a variety of factors discussed [indiscernible] Securities and Exchange Commission.

We disclaim any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments except as required by law.

There is more complete information regarding forward-looking statements, risk and uncertainties in the company's filings with the SEC available on the SEC website and our website. At this time, I’d like to turn the call over to My Chung, President and CEO of Luna Innovations..

Thank you, Dale. And thank you all for joining us today. I will start our call today with an overview of our operating results and an update on our key strategic initiatives, after which Dale will provide more detail on our Q1 financials and then we will be happy to take any questions you may have.

As we discussed on our call in March, effective January 1 of this year, we entered into a new VMI, or vendor managed inventory, with our largest customer in China. During the first quarter, we made our initial delivery of 100 gig receivers into the VMI, with those products being in turn accepted by our customer.

We have successfully implemented this new VMI arrangement, the goal of which is to be more of a just in time supplier.

With that just-in-time implementation comes an actual short-term deferral of some revenue as the customer consumes the inventory supply they already had on hand prior to the VMI, as well as pulling only what they need rather than accepting the full build all at once.

As a result of that and an overall market-wide softness in purchases of optical components in China, as you have probably heard from many other companies in this sector, we recognized product and licensing revenues of $8.8 million in the first quarter of 2017 compared to $10.3 million in the first quarter of 2016.

Our current outlook is in line with our peers.

That is the softness in China will continue through the second quarter with new tenders being released in the third quarter, in the meantime, when the process of getting our smaller second-generation 100 gig receivers qualified in time for this next stage of China's network buildout, the expansion of 100 gig into their provisional and metro networks.

Our Gen 2 receiver has successfully passed the initial qualification test and is currently undergoing the second phase of certification.

With respect to our second strategic growth initiative, the use of fiber optics to measure strain and composite materials, we continue to make inroads into our target market and customers in the aerospace and automotive industries. Sales of our Odyssey systems in the first quarter of 2017 were double that of the first quarter of last year.

Our current sales pipeline for Q2 anticipates additional orders from at least three different aircraft manufacturers. In fact, we have recently arranged for one of these manufacturers to send a person to our factory to work for several weeks side-by-side with our applications engineers to fully understand the ins and outs of working with our system.

In addition, we are beginning to see more traction in the automotive industry with recent testing successfully completed by one of the large automotive manufacturers. In near term, expecting sales into the materials research and light-weighting groups of two other auto manufacturers.

One of our employees has been added to two influential standard-setting bodies, the American Composites Manufacturing Association and High-Performance Council and the Institute of Advanced Composites Manufacturing Innovation.

Also, one of our employees has been elected on to the executive board of the Western Regional Strain Gage Committee, a highly influential committee for aerospace. Turning briefly to our technology development division where we mainly do government research.

We continue to grow at a double-digit rate, with year-over-year growth of 15% for the first quarter.

This group has done a phenomenal job over the past couple of years and improving their win rates both for new contracts and in demonstrating positive results in their phase one program, resulting in the government awarding us larger phase two follow-on contracts.

As these programs typically run over a period of several months, we expect to see continued revenue growth around this level for next quarter as well.

Before I turn the call back to Dale, I would like to mention, for those who are not already aware that Rob Risser, who was the general manager and one of the original founders of the Picometrix operations in Ann Arbor, Michigan passed away a couple weeks ago.

Rob was very well known and highly regarded in the company and throughout the telecom industry. He will be missed by us all.

Since Rob's passing, I've been spending more time with the Picometrix division and I can tell you firsthand that the team remains focused on executing on our growth opportunities in China for our high-speed optical receivers as well as continuing to build our terahertz install base level globally.

At this time, I'll turn the call back over to Dale to cover in more detail our financial results..

Thank you, My. Revenues for the three months ended March 31, 2017 were $13.1 million compared to $14 million for the first quarter of 2016. Within that, technology development revenues increased 15% to $4.3 million in the first quarter 2017 versus $3.7 million in the first quarter of 2016.

Product and licensing revenues declined to $8.8 in the first quarter of 2017 compared to $10.3 million in the first quarter of last year. As My mentioned in his remarks earlier, this year-over-year decrease resulted from lower sales of optical receivers into the China market.

Margins improved to 36% of revenues for the first quarter of 2017 compared to 35% of revenues for the first quarter of 2016.

This overall margin improvement came mostly from the products and licensing segment where the product mix being less weighted toward 100 gig receivers, brought the average margin for the product segment up to 41% versus 39% in the first quarter last year.

Our resulting gross profit was $4.7 million for the three months ended March 31, 2017 compared to $4.8 million for the first three months of 2016. Operating expenses improved to $5.9 million for the first quarter of 2017 versus $6.2 million for the first quarter of last year.

SG&A expenses decreased due to lower share-based compensation and lower amortization costs in 2017. Research, development and engineering expenses also decreased $0.1 million due to lower personnel cost.

Our resulting operating loss was $1.3 million for the three months ended March 31, 2017 compared to $1.4 million for the first three months of 2016 and our net loss attributable to common stockholders was $1.4 million for the first three months of 2017 versus a net loss attributable to common stockholders of $1.5 million for the first three months of 2016.

Adjusted EBITDA was flat at negative $0.1 million in both periods. A reconciliation of adjusted EBITDA to our net loss is provided in the tables included in our earnings release today. We ended the first quarter of this year with cash of $12.1 million using a net $0.7 million of cash during the quarter.

Cash used during the first quarter including $458,000 of debt service and we ended the quarter with our remaining balance of $3.8 million on our bank debt. And with that, I’ll turn the call back over to My..

Thank you, Dale. At this time, I would be happy to take any questions you might have..

[Operator Instructions] Our first question is from Gregg Hillman with First Wilshire Securities. Your line is now open..

Hey, hi. Good afternoon, gentlemen. Hey, My, can you talk about – you’re talking about softness in the industry through Q1 for the high-speed optical receivers.

Do you have the same softness as other people, other players that have reported earnings in the same segment?.

We had slightly a little bit more because of the start of our VMI, right? Previously, we shipped direct bulk to the end customer. In this case, because of the way that VMI is structured, we’re there pulling inventory when they needed, not only ship it. All right? And because of that pull, it was softer.

Although we shipped more, it didn’t get pulled from the VMI..

And what was the – what’s the overall macro drivers driving the softness in the industry and in China in particular?.

I think it’s just new budgets being released, right? That's what’s seemed very common across the board, is that the budget for advancing the provisional and the metro network just hasn't been released yet.

We also saw a difference in that – they transitioned the point person who is managing all of that today, the contact that we had last year moved on to a different assignment and we’re in the process of developing a relationship with a new person..

And then my final, can you talk about fiber-to-the-home a little bit and also your data center, your R&D efforts there?.

Okay. On Fiber-to-the-Home, our big push is with our 10 Gb APD. We've gotten a large traction on that today that is just starting in China as well as – we also have a big presence in South Korea. So, it is a big transition from the 2.5 gig. That’s becoming more commodity to the buildout to the higher-speed 10 Gb..

Do you think that will impact you, that will be material to your company this year?.

We believe so. We’re building out the manufacturing. We’ve purchased a number of capital equipment that we started last year or adding to it. So, yes, our expectations are that indeed that that becomes a significant part of our business..

And data center will be further out, is that right?.

Data center, we’re capitalizing on data center today. It’s more on the test and measurement product..

Okay..

One of the technologies that is being explored extensively for the data center market is silicon photonics. And we have a test set that's ideal for that, that we sold into the University of Santa Barbara and into a number of companies doing silicon photonics research. We continue to see activity there.

They’re building a big manufacturing site in New York. We’re involved in that.

So, again, on data center, you’ll see us growing more on a test and measurement side with the new technology that will eventually replace the transceivers that are being deployed today, right? Then we are addressing the transceiver market as we are in the high-speed optical receiver business for the data center..

Okay, thanks very much. Also, I was sorry to hear about Rob’s passing..

Yeah, that was a big shock to all of us..

Thanks for your comments, My..

You’re welcome, Gregg..

Thanks, Gregg..

Our next question is from Tim Savageaux from Northland Capital. Your line is now open..

Hi, Tim..

Yes. Hi. Good afternoon. I have a question on the – first question on the optical business outside of China. As you mentioned, in addition to the VMI transition, you do see some demand weakness. I don't imagine that will improve until the second half.

But I wonder if you can talk to the trends in your 100 gig receiver business in the rest of the world, which I gather accounts for half of the business..

No, actually, our entire – I’d say, our entire 100 gig business is China. The other aspect of our high-speed optical receiver business that’s not China related is more on the test and measurement side. People like Keysight or Tektronix where we develop a special product that they used in their test equipment is the other big part of our HSLR business.

The business that Picometrix had previously, which was still related to China, it was with a European-based equipment manufacturer that has pretty much dwindled down to negligible revenue for us. .

Sometime ago. .

Yes. Prior to the [indiscernible]..

I guess I was referring to the part of the HSLR business that’s not China, kind of on the test and measurement side.

What sort of trends are you seeing there?.

We’re seeing that continue to be strong. All right? In fact, our projections for this coming quarter is very high, more on the test and measurement side, than it is on the transmission side..

Right..

What’s driving that, Tim, is, again, they're preparing for this whole transition in higher speeds..

Right. And there you’re surveying the test manufacturers that are working with….

Manufacture and test..

…carriers..

Correct, correct..

Right, understood. Great. And over on the Odyssey side of the house, I think you mentioned growth in that business of 100% year-over-year as well as some pretty strong order activity. I wonder if you could talk about what sort of growth profile you expect for Odyssey throughout the year..

Our expectation is to indeed double. A couple of things have happened for us in that industry. One is the evaluations that companies are doing of our product are coming out very, very positive. We’ve come out with a lot of major enhancements to not only our firmware, but also on the hardware side.

And for the most part, every one of these players have been working with us in the last couple of year. So, although it hasn't been perfect, they keep on coming back to us because at the end of the day, our solution is really the only viable solution they have for adequately testing and evaluating composite structures.

Our management team has done a phenomenal job of getting the system to where it is today. We have dedicated sales people that are calling on these markets now. Very well trained and getting a lot of traction.

The other thing that’s created some acceleration in this market is, of course, the final system that we come out with, to be able to test an entire aircraft, needs to be a lot more channels than our single-channel system today. We are very much in the process of developing that.

And again, we've been very open with our customer base because that is a criteria that they have in order to fit into their ecosystem. And what they've seen of what we have available today, they've been extremely impressed with..

Great. And then, finally, maybe one final question, which is kind of on overall trends within the kind of optoelectronic part of your business. We have seen at least some uptick in one of the sort of industrial markets served by fiber optics. I don't know to what extent that correlates with what’s a pretty broad-based business on your end.

But you’ve been seeing kind of – I guess sort of modest declines there of late. I wonder if you could talk to the kind of optoelectronic business trends..

You're right. We have been seeing some modest declines in that business over the last several quarters, but we’re actually seeing a little bit of an uptick and we expect that group to get back to really just a single-digit kind of, but positive growth rate this year..

Any kind of market drivers there that are notable…?.

It depends, I think. Defense spending is really driving it for us..

Great. Thank you very much. I’ll pass it along..

Okay. Thanks, Tim..

Our next question is from Randy Knudson [ph]. Your line is now open..

Good afternoon..

Hi, Randy..

I wanted to first ask you about your $2 million stock repurchase, which was announced about a year ago and see if that's all been concluded or is there still money left to buy stock?.

So, we have not consumed the entire amount. In fact, there was not any repurchase activity that was done in Q1 just because we set this up in a 10b5-1 plan. So, there were specific parameters that were established for it. And with the increase in the stock price that we had end of last year and in Q1, we went outside of those repurchase parameters.

So, we’ve not spent the entire amount. It was established as a one-year plan. So, it’s something that was approved at our board meeting in May of last year and it will be another topic of discussion at the May board meeting this year as to whether or not we want to extend that or under what parameters we would..

Okay, thank you. I was glad to hear you at least mention your terahertz division. I know in the last couple of phone conferences, I don't think the word terahertz was even mentioned, which kind of surprises all of us old-time API investors. And so, I just want to see what the trend is there. What are your thoughts on terahertz in Ann Arbor.

Is it coming along? Or are we going to – is it going to be one of your drivers in the future?.

It’s actually coming along rather well. The focus that we put them on was really improving the quality of the system and the dependability of the measurement. We had one value-added reseller that was one of the first ones we signed up. And their feedback to me when I came on board was they couldn’t depend upon the quality and reliability of the system.

And as a result, we had a lot of units sent back for repair and we decided, hey, let’s slow down a little bit, let’s fix the problems that we need to fix, so that customers can rely on the systems that we’re selling and the measurements. And that’s come a significantly long way. We’ve signed up new value-added resellers.

We’re in discussions with quite a number. So, in fact, I think Q4 was a very strong quarter for us for terahertz. And I guess we should have mentioned it at the last earnings. But it’s still active. The team is still intact. It’s the same team that's been there.

It’s not growing quite as high-speed optical receivers, and so we downplayed a little bit, but by no means that we shut it down..

Right.

And once again, what do you see in the future for the terahertz division? Is it something that's going to – I am assuming, by your mention of Q4, it's reached profitability?.

Yes, it did. It’s a very good quarter. Our focus is on manufacturing applications and we have a number of aircraft – military aircraft manufacturers talking to us about utilizing that technology as a means with which to find faults. They’ve funded a chunk of research for us in anticipation of that. So, I think that will be a big application for us.

And likewise, our sales guy is actively involved with a number of customers from a process manufacturing to, in a number of cases, to replace [indiscernible] gauges that are currently being used..

Got you. Primarily in the wood plastic, those areas..

Exactly. Yes, yeah..

And then the airline inspection that you talked about, is that something related to what you're already doing for the F-35 in terms of the paint application or is this something to do with inspection of the structure itself to what we saw at Wright University [ph]..

No, it’s the F-35..

And there’s also some – we’re actually going to do a big demonstration on a submarine as well..

Okay, great. And I guess my kind of related question to that is with, it's really difficult to find any information about Lunar.

I do applaud you on your blog that you have occasionally, and I read it and try to share that actively on the net, but it seems like there's a lot of things that you would have an opportunity to share with us that might encourage some shareholder buying….

We recognize that and we are looking to make significant changes here in this year..

Great..

All right? It’s been a challenge for our team to assimilate all the different technologies that we ended up with from the merger. They’ve been understaffed. In fact, I’m looking at the people in charge of that right now and they keep on telling, My, we need more, we need more. So, it is on my list this year.

All right? That we do need to improve dramatically information flow out, both from an investors’ perspective as well as from a technology. .

And then, in terms of your Odyssey platform, which sounds like it’s really one of your primary focuses going forward in the future. That too is – other than your blog, it’s almost impossible to find any information out there. I was pleased to hear – and let me just see if I understood you correctly.

You're really – you really have no direct competition in that particular area of composite or stress testing.

Is it – did I understand that correctly?.

That is absolutely correct. Our competition is the traditional individualist strain gauges and people have to put on – quite a significant number of them trying to cover the entire structure. The most of the other fiber optic sensing technology that's out there is more – how do I say it? It’s more single sensor based.

In other words, they add a sensor on to the fiber to test at that point whereas we use the bare fiber and we have the ability to look at reflections along that entire length of the fiber. We don’t need a grading put on the fiber in other words. So, it’s a very unique technology that we have. It’s a technology that we use on the medical space.

So, the reason why Intuitive Surgical was very interested in us because we had that ability that we could track the bends of that fiber throughout the entire length..

Well, that’s great. And it’d be wonderful to have something – more information about that. And I know you mentioned that's one of your goals. So, I would sure appreciate seeing that because I think there would be a lot of people interested in knowing more about that and lots of potential investors that would be excited about that..

No, I agree. And that indeed is something that we’ve tasked ourselves with doing. It was the best kept secret..

Yeah, got you. And lastly, I just want to applaud you also for mentioning Rob Risser because he was truly a great person from my many conversations with him and he’ll be sorely missed. And thank you..

He’s an incredible individual with an incredible background and sad to see how quickly he passed on last month. So, it was a shocker to all of us..

Well, thank you again..

Thank you..

[Operator Instructions]. Our next question is from Jim Kennedy from Marathon Capital. Your line is now open..

Hi, My. Hi, Dale..

Hey, Jim..

Two questions. In terms of the VMI, you said that you have essentially shipped 100 systems and sounds like, at this point, they are on the shelf for future delivery, while some inventory clears out.

Can you kind of describe what you anticipate the logistics be going forward, how quickly – I know you can’t predict how quickly your inventory clears out, but are you anticipating once orders restart that you're going to keep 100, keep 200, keep 500, what determines that number?.

Yes. First of all, it’s more than 100. Typically, because of the price of these and the application, we’re 1000 or so at a time. They’re small devices. They are receivers. They are – what the end customer does with our receivers is they will bundle it with a laser and turn it into a transceiver. So, previously, again, we would ship the entire to them.

I’m going to say it’s 1000, 15000 parts to them. And they would receive it all. And as soon as they receive it, we recognize the revenue. The end customer is measured internally by what they call, again, just in time inventory. So, the buyer really wanted us badly to move towards the VMI.

The VMI says that I ship my inventory to a remote warehouse that is owned by us and managed by us somewhere in Hong Kong. Okay? So, although I ship it to Hong Kong, I don't get to recognize that revenue. I only recognize that revenue when they pull that inventory and they will pull that inventory in a just-in-time fashion.

So, it’s unlikely that they will pull the entire inventory at once. Now, with all that said, we’re a much smaller player than other people, and so the terms that we negotiated with them, all right, are much more favorable terms than their traditional VMI, in that there’s certain – go ahead..

I was just going to say, without giving out too much competitive information or whatever, there's a time frame around which you're not going to be sitting on 2000 of these things for six months with no closure?.

Correct. Correct. Absolutely correct because we can afford it. It’s not within our cash flow to be able to sit on that inventory for that long period of time..

For purposes of this quarter or at least the quarter we’re in now, not the one you just reported, we probably will see some working capital dedicated to stocking that warehouse, so cash-out this quarter.

And then, in theory, in next quarter, we’ll start see that cash come back in as they’re taken off the shelf by the customer?.

Yes. That’s probably a fair statement. We will need to build ahead of requirements and recognize that it will sit in that VMI until the customer decides to pull it. And that's all a function of when their demand is, so the statements that we’re making with regards to the softness everyone's projecting for Q2, we’ll see that.

So, they will start to pull serious inventory starting in Q3..

Got you. Okay.

And then just switching over to Odyssey for a moment, can you give us a feel for the breath of the customer this quarter and then what you expect for the balance of the year? In other words, what you're seeing so far, is it 80% to one customer and 20% spread among others? Or is it pretty evenly divided?.

It’s evenly divided because all of them are in the evaluation stage, right? So, they’re buying one system, four systems to run it through these paces to make sure that indeed the measurements are accurate, okay? They know how to apply the fiber on to the structure. They know how to interpret the data that we’re providing them.

So, we are very much in that – okay, they recognized that we have a working solution. Now, they're putting it in the hands of their test labs to put it through its paces, how well does it work, how dependable is that data, and that will determine when they start to roll that system out to all the other test lives that they have.

For instance, one aerospace aircraft manufacturer has, believe or not, 50 individual test labs in the United States. That will be the first stage that we would expect a big jump. And the next stage is when they get into a final test where they're going to need multiple channels. We don’t have that system available today.

We’ve discussed it and showed them the prototypes, but part of their decision-making process was to make sure that we had more than a single channel system..

Okay. So, all the ones being tested, if you will, today are single channel.

So, for argument’s sake, if I've got 50 labs, am I putting this in two or three and then those labs will determine that whatever – in other words, give the approval for everyone else or are you going to have to provide a system to each lab and they in turn decide if they really want to adopt it across their entire engineering set?.

No, this is standards group. There's a standards body within each of these companies that gives a stamp of approval, whether the measurement technique is valid or not. .

Got you..

Once they leave that, then it’s a matter of – does each lab have the budget to buy one or two of the systems. They would not have to go through the approval process that we’re going through right now..

Okay. And then when the multiple channel is available and I think – correct me if I'm wrong, I think you were attempt – at least were shooting something by year-end in that arena.

Absolutely..

Okay.

So, when that is available, is there – do you anticipate any cannibalization of the single-channel or they are really for different purposes and, therefore, the signal channel will be – continue to be used for whatever purpose and the multiple channel will be added to what the single channel business is?.

It will provide the customer choice, right? The choice was to buy – if they only need a single-channel system, stick with the single-channel system that we have today. If they have plans on adding additional channels, the best path will be the multichannel system. But we are not planning on obsoleting the current system that we have.

It suffices for a high percentage of the testing that they do down at the – strictly the material side..

Right.

Now, the multichannel level, does that get you out on to the manufacturing floor as opposed to staying in a lab?.

No, it still is a development tool. Where it will take us is to that final test structure where they’re testing the entire aircraft….

Okay. I guess it’s….

They’re going to shake and twist that plane and see at what point does it break. That's where [indiscernible] channel..

I guess I mixed my term. That is what I meant, that whole body as opposed to one particular piece of metal or structure..

Correct. It’s correct..

Okay. Very good. Okay, thank you very much..

Thank you, Jim..

Thanks, Jim..

Our next question is from Charles Knoles [ph]. Your line is now open..

Hello. I got here late. So you may have addressed this. I was just wondering what happened with the 2.5 gig event, Avalanche Photodiode. Was it leapfrogged.

It seemed like it was going to be the big thing there couple of years ago?.

It was. It was. Unfortunately, we had the timing wrong, right? When we launched the 2.5 gig APD, that was the technology that the Fiber-to-the-Home was deploying. Shortly after – I’d say within two months, three months after we launched the product, we were surprised that China had moved from the architecture that we were supporting.

All right? The architecture that they started to move towards because of the number of connections they wanted and the price of the service dropping in the Fiber-to-the-Home, they moved to what is termed as super TIA. And the super TIA removed the need for the APD..

Okay..

It lowered the cost of the overall solution to address the lower fees that they would collect on that service. So, it was a big surprise to us, a major surprise. And so, we quickly thankfully – because we already had the design – we quickly jumped on to the 10 gig APD market. We immediately got samples out to the industry. They’ve been evaluating it.

We've gotten some early wins here with some nice volume. Our expectations are still much higher, but it’s proven that the 10 gig part that we have is a very high performing part. And it’s getting a lot of traction. So, we’re still in the infancy stage. As I say, we have one big customer today that's doing very well.

Our objective is to expand that out lot more than where we’re at today..

Sounds good. On your strain gauge, I thought that was something eventually you hoped to have in every plane that was – sort of like a….

Our vision is that every new aircraft or a variation of new aircraft gets tested by Luna. And I think the other thing that a lot of people are excited about now, we’re not quite ready, it’s the Holy Grail that people want, is to be able to test that aircraft in flight.

Okay? See what kind of stress they went through and when it lands to make measurements on the aircraft. As I say, I think we need to take this to the shop. It seemed like it got hit hard on this flight. And that's where you would embed the fiber – the sensing fiber actually in the aircraft itself. All right? That's where everyone wants to get to.

It’s made of composites.

Why not put a monitoring fiber in it?.

Absolutely..

Same with automobiles. And if they want to do that on the new cars, so when you bring your car in, they can tell whether that structure got stressed a little bit, that you’re driving too fast, like Dale does..

Thinking about – I’m starting to pinch my wife out of flying. That has a lot of hazards, but it’d be nice to show her what her landings were like. Okay. Well, thanks. And we’ll talk to you soon..

Thanks, Charles..

And I’m showing no further questions. I would now like to turn the call back to My Chung for any further remarks..

Well, thank you, everyone, for joining us today. And for those who may be attending the upcoming B. Riley Conference in Los Angeles, both Dale and I will be present there and presenting on Thursday, the 25th. We actually fly out a Wednesday night. So, if you happen to be there, we’d welcome a one-on-one or your presence while we do the presentation.

And also as a reminder, for anyone in Roanoke or planning on coming to Roanoke, our annual stockholders meeting will be next Wednesday at the Roanoke Higher Education Center where we hold it every year. And we’d encourage you to attend if you can, but absolutely to turn your ballots in. And with that, thank you for joining us and good night..

Ladies and gentlemen, thank you for participating in today’s conference. You may all disconnect. Everyone, have a good day..