Gerry Haines - Executive Vice President, Chief Financial Officer and Treasurer Mark Aslett - President and CEO.

Tyler Hojo - Sidoti and Company Sheila Kahyaoglu - Jefferies Peter Arment - Stern Agee Michael Ciarmoli - KeyBanc Capital Markets Jonathan Ho - William Blair.

Good day, everyone and welcome to the Mercury Systems' First Quarter Fiscal 2015 Conference Call. Today's call is being recorded. At this time, for opening remarks and introductions, I'd like to turn the call over to the Company's Executive Vice President and Chief Financial Officer, Gerry Haines. Please go ahead, sir..

Good afternoon and thank you for joining us. With me today is our President and Chief Executive Officer, Mark Aslett. If you have not received a copy of the earnings press release we issued earlier this afternoon, you can find it on our website at www.mrcy.com.

Before we get started, we'd like to remind you that remarks that we may make during this call about future expectations, trends and plans for the Company and its business constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.

You can identify these statements by the use of the words may, will, could, should, would, plans, expects, anticipates, continue, estimate, project, intend, likely, forecast, probable, potential and similar expressions.

These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated.

Such risks and uncertainties include, but are not limited to, continued funding of defense programs, the timing of such funding, general economic and business conditions, including unforeseen weaknesses in the Company's markets, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing engineering and manufacturing programs, changes in customer order patterns, changes in product mix, continued success in technological advances and delivering technological innovations, changes in the U.S.

government's interpretation of federal procurement rules and regulations, market acceptance of the Company's products, shortages in components, production delays due to performance quality issues with outsourced components, inability to fully realize the expected benefits from acquisitions and restructurings or delays in realizing such benefits, challenges in integrating acquired businesses and achieving anticipated synergies, changes to export regulations, increases in tax rates, changes to Generally Accepted Accounting Principles, difficulties in retaining key employees and customers, unanticipated costs under fixed price service and system integration engagements and various other factors beyond our control.

These risks and uncertainties also include such additional risk factors as are discussed in the Company's filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 30, 2014.

The Company cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

I'd also like to mention that in addition to reporting financial results in accordance with Generally Accepted Accounting Principles, or GAAP, during our call, we will discuss several non-GAAP financial measures, specifically, adjusted EBITDA and free cash flow.

Adjusted EBITDA excludes interest income and expense, income taxes, depreciation, amortization of intangible assets, restructuring expense, impairment of long-lived assets, acquisition costs and other related expenses, fair value adjustments from purchase accounting and stock-based compensation costs from GAAP net income.

Free cash flow excludes capital expenditures from cash flows from operating activities. Reconciliation of adjusted EBITDA to GAAP net income and free cash flow to GAAP cash flows from operations are included in the press release we issued this afternoon. With that, I will turn the call over to Mercury's President and CEO, Mark Aslett..

Thanks, Gerry. Good afternoon, everyone and thank you for joining us. I will begin today's call with a business update. Gerry will review the financials and guidance, and then we will open it up for your questions. Mercury is off to a good start in fiscal 2015. Our results from continuing operations were significantly stronger year-over-year.

We delivered record defense bookings for the third quarter in a row. Total bookings and backlog reached all-time record levels growing 88% and 57%, respectively. Revenue for Q1 was up 7% while adjusted EBITDA more than doubled from the prior year to a level well above our guidance.

We returned to GAAP profitability and we continue to generate positive cash flow from operations. Mercury’s success this past year in delivering bookings growth rates well in excess of industry growth demonstrates the strength of the business and technology strategies that we have pursued.

Through innovation in our existing businesses as well as our recent strategic acquisitions, we've built a best-in-class portfolio of secure processing products and capabilities across the entire sensor chain.

We successfully leveraged this portfolio to strengthen and expand our position with key customers on critical production programs in the right segments of the market.

Together with the differentiated technology we’ve developed internally, the businesses we’ve acquired in FY12 have been instrumental to our success in growing the potential value of our franchise programs. Turning to our first quarter growth metrics in detail, total bookings came in at $85 million beating the record of 80 million set in Q4 of FY14.

Our total book-to-bill for Q1 was 1.6. Total quarterly defense bookings nearly doubled year-over-year to a company record $82.5 million driven largely by continued strength in our Mercury Commercial Electronics, or MCE business. Our defense book-to-bill in Q1 was also 1.6, up substantially from the 1.0 we reported in Q1 of fiscal 2014.

Defense backlog and total backlog exiting Q1 were up 67% and 57%, respectively, year-over-year. International defense bookings including FMS were 30% of the total bookings compared with 17% in Q1 last year. Our total defense revenues for Q1 were $51.3 million, up 19% year-over-year.

International defense revenues including FMS were 18% of total revenues compared with 21% in Q1 of FY14. Revenues from radar and electronic warfare accounted for 90% of total defense revenues in the first quarter versus 83% in Q1 last year. Radar revenues, which make up the largest segment of MCE revenues, grew 34% year-over-year in the first quarter.

SEWIP Block 2 and Patriot were our two largest revenue programs this quarter. Among the other significant revenue programs were Aegis and F-35.

Looking forward, our forecast for improved revenue growth, high margins and lower operating expenses is driven by our strong backlog of recent bookings on five key programs combined with the completion of our acquisition integration efforts. Now in its final phase, our acquisition integration plan remains on track and on budget.

During the first quarter we completed the Chelmsford headquarters consolidation into our new Advanced Microelectronic Center, or AMC, by moving our digital operations team to Hudson, New Hampshire. This move co-locates all of our people involved in subsystems manufacturing and integration.

In addition, the Hudson AMC serves as our world-class scalable RF and microwave manufacturing plant which continues to improve our ability to rapidly drive advance microelectronic solutions into the marketplace.

From a strategic perspective, the integration plan has enabled us to capitalize on the industry downturn by streamlining and retooling the business and creating a platform that we can continue to grow both organically and through future acquisitions. At the same time, we’re installing state-of-the-art integrated business systems.

These allow us to centralize wherever possible administrative and manufacturing operations across the company following our recent acquisitions. The resulting time and resource savings are enabling us to improve gross margins, reduce G&A expense, and drive greater efficiency through the organization.

The next phase of this strategy is focus on increasing Mercury’s enterprise value by scaling the platform that we’ve built. We will continue to drive innovation internally while also seeking to acquire businesses that align closely with our strategy and present revenue and cost synergies.

We've strengthened our M&A team to help execute this next phase. Following Gerry Haines’s appointment as CFO in September and as announced on October 20th, Mike Ruppert will be joining Mercury as Senior Vice President, Strategy and Corporate Development reporting directly to me.

Mike’s in-depth knowledge and experience with M&A in the aerospace and defense industries will make him an invaluable member of our senior leadership team. Last quarter and earlier in my remarks I mentioned that there were five key programs that were important to us achieving our goals for fiscal 2015.

I’m pleased to report that we continue to make great progress on these programs. The first of these programs is Patriot where last quarter we received a $39 million order for the U.S. Army and certain FMS upgrades. This will continue to translate into revenues over the next several quarters.

The second program is Aegis where this quarter we received a $30 million booking that primarily consists of FMS related development production. Third is F-35 where we received a $27 million booking during the quarter following major bookings in FY14. The fourth program is Seaward Block 2.

As anticipated, we received additional bookings in Q1 associated with LRIP phase II that have been delayed from FY14. We expect further bookings and revenues for Seaward as the year progress. The fifth program is Filthy Buzzard in Mercury Defense Systems where we also had a major booking in Q1.

With some of our largest forecasted FY15 bookings coming in Q1 and earlier than we had anticipated, our visibility for the year continues to improve. Moving now to the longer term. We expect to benefit from four major industry growth drivers.

One is the DoD strategic pivot to the Asia-Pacific region, the second is electronic upgrades to aging military platforms, another relates to the growing importance of FMS in international sales, and four, special operations force, quick reaction capabilities.

At a more micro level, these industry drivers translate into greater outsourcing opportunities in three main areas that form the basis of our plans for fiscal 2015 and beyond.

The first outsourcing opportunities is in specialized server-class computing beyond the sensor, including other onboard mission critical computer applications that historically we haven’t played in. The industry is moving away from commodity commercial computing as more and more of that design and production has moved offshore.

At the same time, we've positioned Mercury as the leading U.S. owned domestic designer, developer and producer of specialized embedded server class processing for defense and intelligence applications. This has added significantly to the size of our overall addressable market and opportunities on franchise programs.

The second opportunity is RF and microwave outsourcing. The RF and microwave industry continues to reshape itself at a rapid pace. Smaller companies are having a hard time dealing with defense funding delays. This has created major supply chain risks that our customers are seeking to resolve.

Larger players are also going through significant restructurings, causing additional supply chain disruption. Both of these issues have created opportunities for us to gain market share. The third opportunity is in pre-integrated sensor processing subsystem sales.

Our RF and microwave acquisitions and AMC investments that have been well received by our customers. This has positioned us to take share competitively and to expand our content on key programs and platforms. So in summary.

We continue to believe that Mercury’s strategy, technology, capabilities and ongoing programs and platforms align well to DoD’s new roles and missions. Our focus for the near-term remains to leverage our relationships with the primes to drive bookings and revenues from existing programs as well as new programs and platforms in foreign military sales.

Given our bookings and backlog momentum in the second half of 2014, which continued in the first quarter, we are confident in our outlook for fiscal 2015.

Sustaining our revenue growth at above industry average levels while completing the final phase of our acquisition integration plan should enable us to continue realizing the substantial operating leverage that we're building in our business.

It should further strengthen Mercury’s position to deliver significantly improved profitability, cash flow generation and shareholder value as we move forward. We will be discussing all of this in detail at our upcoming Investor Day on November 12th.

We will be hosting this year’s event at the Hudson, New Hampshire AMC and we sincerely hope that you can join us. With that, I'd like to turn the call over to Gerry.

Gerry?.

first, higher sales volume primarily driven in Q2 by the Patriot program; and second, lower operating expenses primarily due to lower headcount and an increase in customer funded R&D. In terms of the balance sheet, we expect to continue building our cash balance through positive free cash flow again driven primarily by cash earnings.

This will be partially offset by capital expenditures largely related to the final stages of our integration plan. In summary, a year ago we set a goal for the next 18 months of creating a fully integrated business that we can continue to profitably grow organically and also scale for acquisitions.

As demonstrated by the results that Mercury has delivered since then, we’re on track toward achieving that goal. Our acquisition integration plan will be concluded by the end of the current quarter.

With increasing operating leverage anticipated from both our restructuring and integration efforts, we’re in a good position to translate our backlog, forecasted bookings and revenue growth into even stronger earnings performance over the course of fiscal 2015. With that, we’ll be happy to take your questions.

Operator, you can proceed with the Q&A now..

(Operator Instructions) And our first question comes from Tyler Hojo, Sidoti and Company. Your line is open..

Just I want to talk about bookings a little bit – in a little bit more detail first. Obviously very strong results here in Q1 and I get the commentary about kind of a normalization as we move through the year.

But could you maybe just talk -- maybe just in generalities, I mean, do you think backlog has peaked here or do you expect kind of book-to-bill ratios to be maybe at 1 or maybe a little bit north of it as we move through the fiscal year?.

As Gerry said on the call, Tyler, we've had basically three quarters in a row of record defense bookings and this is I think the highest backlog and the highest bookings we've seen in the company’s history. I’d love to continue at a 1.6 book-to-bill, but it’s probably not realistic.

We are targeting basically having a positive book-to-bill for the remaining quarters of the year. But I’m not going to forecast what we expect the bookings to be at a total year level..

And just from a program perspective, you mentioned kind of expectations for additional Seaward Block 2 orders through the remainder of the year.

Is there anything else maybe worth highlighting in terms of kind of being the key drivers there?.

So as I said on the call, the top programs, I said this last quarter and I kind of repeat it again this quarter, from a bookings perspective there are really five major drivers for the year, Aegis, SEWIP, F-35, Patriot and then Filthy Buzzard in the Mercury Defense Systems business.

As you probably remember, we had a very, very strong year in Patriot in fiscal year '14 after a very weak fiscal '13 and we did $45 million of bookings in '14 alone. We do anticipate some bookings for Patriot as the year proceeds largely related to certain FMS sales.

But I think what we’re going to see is really a bleeding off of those bookings that we previously booked. Seaward, we do expect to see additional bookings as the year progresses.

That’s tied to our success on increasing or expanding our content on that particular program as well as later in the fiscal year the anticipation as the Block 2 moves into full rate production. Aegis, we also anticipate continued bookings probably towards the back end of the year.

We've basically already overachieved the bookings in the first quarter than what we did in the whole fiscal '14. So we are off to a very, very strong start there. And then F-35 I think has the potential additional bookings again given this very strong performance in the first quarter. We do anticipate ongoing bookings as the year progresses.

And then finally, Filthy Buzzard, I think we'll see a couple of other meaningful bookings throughout the year. So, neck-neck, I mean those five programs made up roughly 83% of our bookings in Q1 and they are really what’s driving our performance at a year level..

And then maybe just lastly, certainly don’t want to steal any thunder from your Investor Day next month, but maybe you can just talk a little bit about kind of some of the progress made in the AMC..

Sure. So we've had over 40 customers literally go through the facility now. We've had a group of executives in from one of our largest customers here literally yesterday and today discussing not only the processing part of our business but also the RF and microwave.

And like we've seen in other customer visits, they're all very suitably impressed with the capabilities that we've built in that particular facility. And that’s really the reason why we’re holding this year’s Investor Day conference up at the AMC in New Hampshire.

I think it’s a great opportunity for investors and shareholders as well as the analyst community to see this facility which is very important to drive the growth in the business particularly in some of the larger EW programs that we’ve been successful on..

Thank you. And our next question comes from Sheila Kahyaoglu of Jefferies. Your line is open..

I guess maybe talk a little bit about international mix this quarter.

It was slightly lower than it’s been in prior quarters, just timing of that, or was it higher SEWIP sales?.

So if you look at on a bookings basis, Sheila, our bookings, international defense bookings as a percent of total was 30% in Q1 versus approximately 17% a year ago. The largest driver there in terms of the increase was actually the Aegis program where we're involved in a number of different foreign military sales.

Revenue as a percent -- international and FMS sales as a percent of total revenue was down 3 percentage points, but it really comes down to program mix at the end of the day..

And then just on M&A, it’s clear that you have the increased visibility of maybe putting you back on that track.

Can you maybe discuss what you are looking for in potential targets? Is it program mix, is it certain software, certain capabilities that you are looking for, maybe if you could give us an idea?.

So I think as we mentioned, I shuffled the team a little bit. Gerry who was running our M&A activities has moved over to the CFO role. And as we announced on October 20th, we've just hired Mike Ruppert who will start November 20th to run our M&A activities.

Mike is a very experienced M&A professional having worked at UBS, Lazard and Lehman, all in the aerospace and defense sectors and done some pretty large deals. As it relates to our target areas, we think that our strategy really works. And so we are focusing in on RF and microwave as well as across the sensor processing chain.

So it's really sticking closely with the strategy, but looking for synergies both from a cost and from a revenue perspective. And I think we've been able to demonstrate that when we find a target, we are able to generate those synergies with the deals that we've done since fiscal '12..

Thank you. And our next question comes from Peter Arment from Stern Agee. Your line is open..

Mark, I was wondering if I could just dig back in a little bit into the backlog. You've had a lot of progress and a lot of the wins have been in your kind of the key product categories, your traditional processing, or it seems like.

How about on the RF and the microwave side? I know this was a big focus of building that out and it comes with a lot of more of an opportunity to build out the content in the future.

Are you seeing -- are we beginning to see that tick in to expand your backlog at current levels or we haven’t even touched upon that yet?.

Absolutely we are. If you look at the SEWIP program, we have been hugely successful growing our content and expanding our position on Block 2 into a derivative program as well as expanding on Block 3 and that's pretty much all RF and microwave. And that program is hundreds of millions of dollars of revenue potential over its life to Mercury.

And so at our Investor Day on November 12th up at the Hudson AMC, we are going to lay out what we believe to be the proof points around the success of the strategy in not only RF and microwave, but also in the processing dimension.

But SEWIP is probably the best example given the enormity and the fact that it's probably the next big program that’s going to drive growth in the business..

And so is the RF – so would that not begin to show up initially? Is it more of a book and ship type business or would you see that initially continue to flow through to the backlog?.

It’s not necessarily book-ship. We did 8 million of bookings for SEWIP in Q1. As we talked about, we have seen some delays on LRIP phase 2 in fiscal '14. So we got the booking as we anticipated. And actually SEWIP was our largest revenue producing program in the first quarter at over $9.5 million.

So I think we are already shown that we have got a pretty significant and healthy growing RF and microwave business..

And Gerry just quickly, what is the tax rate assumed for the year for your GAAP earnings projection?.

The ECR as I mentioned, at least for Q2, is 40%. I think that’s going to move around for the year. There are a few different things going on. It was very low in the first quarter. For the year on balance, it should not be 40%. It will be lower than that, probably more normalized rate in the mid-30..

Thank you. And our next question comes from Michael Ciarmoli of KeyBanc. Your line is open..

Mark, maybe just a little bit more on kind of the M&A environment. Are you guys going to be looking to sort of -- you've got two big competitors out there I guess.

I mean are you guys going to be looking to consolidate this market at all? I mean is that part of the strategy for synergies or is the driver going to be more looking for key technologies that can get you on to key programs platforms?.

So if you look at the first phase of the acquisition strategy, the way which we described it, it was really a capability and program driven strategy. And I think we very successfully found companies that were non-overlapping that gave us the complete capability end to end to build pre-integrated sensor processing subsystems.

What we’ve been focused on as part of our acquisition integration plan is really creating a platform that we can scale. And so I think the dimensions of that will be in processing where we do see the opportunity of looking to continue to acquire in that dimension, but also in RF and microwave.

So those are probably the two primary pillars, Mike, of kind of what we’re focused on, because we believe that we've built a business platform that will allow us to profitably scale and we’re going to be looking for deals that have got both revenue as well as cost synergies..

And then just on -- obviously you guys are getting tremendous strength and growth here on these five programs. Can you give us a sense -- I mean should we think about the backlog being diversified maybe around those same kind of five programs? And I am kind of looking at the concentration here.

Is that something you guys are looking at as you're maybe looking to develop new products? You’ve got the big anchors out there, but clearly there is going to be some concentration, some risk around those programs.

But maybe what else are you doing to try and diversify some of that risk?.

I would look at it from a slightly different perspective, Mike, and say, our strategy has been to target programs that are very well funded, that are in production, that are right in the middle of the DoD’s new role of emissions, because if anything, I think those programs represent lower risk than trying to go after new design wins of which there are probably few and far between in this environment.

And I think that strategy is serving us extremely well. We have grown the backlog substantially and I think we've reduced the volatility in the business and we still see more opportunity for growth. So we're clearly pursuing other programs, but that’s -- the strategy that we’ve been pursuing is working very, very well for us..

Last one for me, just can you comment maybe on sort of the cadence of or even the run rate on your kind of book-ship business, if you’re seeing any changes there with kind of your level of fair activity or even amid kind of current continuation resolution, are you getting more confident in that business or are you seeing a pick-up at all?.

I don’t think there’s really been any change, Mike, versus the last few quarters. It kind of moves up, it moves down a little.

As you know, given the impact that we saw in fiscal '13, a key strategy was to basically build the backlog so we were actually less dependent upon book-ship that would help us manage and navigate through this difficult environment more effectively.

And you can see that in our backlog numbers and so we're less reliant on book-ship than what we’ve been in years past and I think that’s generally a good thing..

Thank you. And our next question comes from Jonathan Ho of William Blair. Your line is open..

Just given the visibility that you guys now have to some of these larger programs, is there any lumpiness that maybe we should expect from a revenue perspective? I mean it seems like some of the booking came in a little bit earlier than expected, so just trying to get a sense from you whether if the seasonality pattern might change at all for the balance of the year?.

We don’t believe so. I think we’ve obviously delivered the results in Q1 and we’ve guided for Q2. So you kind of get a perspective on what H1 versus H2 looks like. And the year is progressing, as we planned other than the fact that we got some of the booking earlier, which we view as a good thing not a bad thing.

So we’re on-track and we’re confident in our ability to deliver the year..

And then can you talk a little bit about what was the reason why the commercial business was down? Was this just sort of a tough comparison? And should we -- how should we be thinking about sort of the level of activity for commercial going forward?.

It's such a small part of our business overall, Jonathan, it’s really not a driver at this point. And depending upon what happens with some of the legacy business in the commercial segment, it can be up a little, it can be down a little. I wouldn’t read too much into it..

And just in terms of the actual AMC cost savings, you guys talked about sort of being able to realize the rest of the cost savings.

Is there anything else that we should be looking at in terms of revenue synergies maybe driving the rest of the business over the course of the year as well or some type of margin improvement that you see from the facility?.

You're just trying to steal my thunder from Investor Day, right?.

Sorry..

So seriously, I think at Investor Day, we’re going to lay out what we believe to be the proof points and the success around the acquisitions that we've done, the investments that we've made in the AMC. We’re going to tie that back to key programs and to enumerate the potential volume associated with some of those key programs overtime.

And you’ve got to come to see the numbers, but it should be pretty cool..

Thank you. (Operator Instructions) And our next question comes from Noah Steinberg of G2 Investment Partners. Your line is open..

This is actually Josh Goldberg for Noah. So I guess just a couple of quick questions. Obviously your bookings have been very strong and it seems like you are having quite a bit of visibility into this year.

Just curious with the amount of backlog that you’re going to ship this year, what’s the reason why your revenue growth even at the high end will just be, call it, 10% to 12%? I mean your bookings, especially your backlog, is up north of 50% year-over-year and to me it would seem like those numbers should come a little closer to each other..

So our guidance is our guidance. It is our best estimate at this point in time. And clearly it’s narrowing of our revenue guidance range in the first quarter. And if we continue to be successful, we are hoping that that guidance range will continue to narrow as the year progresses.

But the guidance that we gave for the year is what we believe right now..

And I guess your comments about book-to-bill to be above 1 also gives you confidence that you’re not going to see a big fall off in your bookings for the back half of the year?.

So we've had three great quarters in a row. We are expecting, as Gerry said in his prepared remarks, that bookings are to normalize relative to revenue. So we’re anticipating the 1.6, 1.5, 1.4 book-to-bills that we’ve seen for the past three quarters..

And remember, Josh, the 12-month backlog ratio that I gave you is the rolling 12-month. So not all that is going to ship in this fiscal year..

But with there being, call it, $64 million above last year’s number, even if you take a big haircut, you’re still pretty comfortable into the year with just the backlog right now?.

So I think hopefully we expressed that we feel good about fiscal 2015. We're executing against the plan. We've narrowed our guidance range for the year and we believe we’re off to a very strong start in Q1..

And just one last one for me. When you were doing $40 million of EBITDA a couple of years back, your stock was $18 to $20 a share. Today it’s closer to $12. Obviously there seems to be a valuation disparity now versus then.

Why aren’t we seeing any more aggressive buyback in place, especially since you're generating so much cash and you have $50 million of cash on our balance sheet?.

Well, so we've been generating positive free cash flow literally since the second quarter of fiscal '13, but it’s in the low single digits. I think as Gerry said in his prepared remarks, cash flow year-over-year is up 8 million. And we feel that we’ve got enough cash to run the business.

And looking forward, we believe that the primary use of cash will like be further M&A. Once we get through our acquisition integration plan and as the EBITDA continues to building the business as the year progresses..

Just one last one for me. I mean obviously a few years back your gross margins were in their high 50s and now they're closer to 44%. I know obviously some of that is because of acquisition.

But do you think that as you grow your company and your top-line, your gross margin can sort of get back to maybe the 50% level in the near future?.

So if you look at our annual pro forma target model, the gross margin range is in the 45% to 50% and I think we’re within that range this past quarter and I think that’s the range that we see right now..

And Josh, one thing to keep in mind there is that you pointed out there is a -- our margin profiles kind of blend now from the historic Mercury and the acquisitions. As applied to gross margin, that’s a little bit of a geography issue.

So don’t be misled by just the gross margin, because in the RF side of the business you see a lot more customer-funded R&D effort which move up into cost of goods sold, which will depress gross margin but it washes out of the operating income line..

Thank you. And Mr. Aslett, we appear to have no further questions. Therefore, I would like to turn the call back over to you for any closing remarks. .

Okay. Well, thank you for taking the time to listen to our call today. We hope to see you at our Investor Day at the Hudson AMC on November 12. That concludes the call. Thank you..

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program. You may all disconnect. Everyone have a great day..