Lisa Im - CEO Hakan Orvell - CFO Richard Zubek - Investor Relations.

Michael Tarkan - Compass Point S.K. Prasad Borra - Goldman Sachs Oscar Turner - Suntrust Robinson Humphrey, Inc..

Greetings, and welcome to the Performant Financial Fourth Quarter and Full-Year 2014 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I’d now like to turn the conference over to your host, Mr. Richard Zubek with Investor Relations. Thank you. You may begin..

Thank you, operator. Good afternoon, everyone. By now, you should have received the copy of the earnings release for the Company's fourth quarter 2014 results. If you have not, a copy is available on our Web site www.performantcorp.com. Today's speakers are Lisa Im, Chief Executive Officer and Hakan Orvell, Chief Financial Officer.

Before we begin, I’d like to remind you that some of the comments made on today's call including our financial guidance are forward-looking statements. These statements are subject to the risks and uncertainties as described in the Company's filings with the SEC. Actual results may differ materially from those described during the call.

In addition, all forward-looking statements are made as of today and the Company does not undertake to update any forward-looking statements based on new circumstances or revised expectations.

Also, non-GAAP financial measures discussed during this call are reconciled to the most directly comparable GAAP measures in the table attached to our press release. I’d now like to turn the call over to Lisa Im.

Lisa?.

Thank you, Rich. Good afternoon everyone, and thank you for joining us for our earnings call.

Today I will provide you with an overview of our operational results and then after Hakan walk you through the financials in greater detail; I’ll discuss our recent events and provide an update on the procurement status for the awards with the Department of Education and CMS. Lastly, I’ll discuss our expectations for 2015.

We have had happened headwinds that have softened our results in the short-term.

However, we believe our business will grow in the mid to longer term as we continue to strengthen our position in the market with strong secular growth, by aggressively managing and leveraging that which we’ve control over, productivity, increasing business with current clients, new business building and expense restructuring.

Before I begin, the business review, I want to thank all of the employees’ performance. With hard work and dedication, help us achieve our results and goals. I also want to thank our clients who have given us the opportunity to serve them in the past year.

In 2014, we reported overall revenue and adjusted EBITDA of $195.4 million and $44.7 million, respectively. These results were lower than we anticipated a year-ago, but consistent with our more recent guidance, due to the ongoing delay associated with the CMS contract renewal process and fee reduction flow through from our guarantee agency clients.

As we look specifically at our key markets during 2014, total student lending accounted for revenues of $138.3 million, which is down approximately 15.5% from 2013. However, total loan placements in 2014 increased to $6.7 billion compared to the $6.6 billion we received in 2013.

There were a couple of key changes to our student lending business in 2014. The first one was effective in July 1, through regulatory requirements, guarantee agency clients incorporated income based repayment rehabilitation or IBR, for defaulted borrowers.

This allowed many more borrowers to qualify for affordable rehabilitation payment based on their income versus their total outstanding loan balance. In the mid to long-term, this will be a benefit for us as a greater number of defaulted borrowers access rehabilitation.

The second change was through the same regulatory change, the retention fees that guarantee agencies are paid also decreased. As a result, we also saw lower rehabilitation fee, which became effective July 1. The ongoing impact is expected to be about $5 million per quarter in revenue and EBITDA.

Although IBR increased the pool of borrowers with loans qualified for rehabilitation, our guarantee agency clients and the Department of Education imposed additional requirements to establish borrow eligibility which added additional time and interaction with borrowers. We have to adjust our operations to adeptly accomplish this.

And frankly, it took four months longer than we anticipated. These new requirements have several effects. One, the loans were delayed from qualified for rehabilitation timely in Q3 and early Q4. Two, and for those four months, our productivity declined while we focused on refining our process to obtain the required documentation.

This will negatively impact the first half of 2015. And third, furthermore, we’re seeing more defaulted borrowers chose rehabilitation which is a nine-month process versus the loan restructuring consolidation process, which takes one to three months and that causes some delay in revenue recognition.

When we did successfully change our operations, we were able to book some of the delayed revenue from the first quarter into the fourth quarter. Furthermore, for the last two months, January and December, we were starting to see some gains in productivity.

As we’ve modeled out these impacts for our business, we have proactively restructured our expenses, so that we can continue to improve productivity and increase our margins. Lastly, we are still awaiting word about the award of the new contract by the Department of Education.

The current contracts has been extended to April 2015 and we do not yet know if the new contract will be awarded by that time or if the Department of Education will exercise another extension with us.

Additionally, as previously announced, the Department of Education changed their rehabilitation fee from a percentage of loan balance to a flat fee on $1,710. This change will become effective July 1, 2015. We’ve included these changes in our guidance for 2015 that I’ll discuss momentarily.

Now turning to our healthcare business, our healthcare revenue in 2014 was $32.5 million, which is much lower than what we reported in 2013, but expected due to the transition and wind down of the original CMS contract.

As the full scope of the old contract ended, net claim recovery volume which is measured on a quarterly basis, declined sharply on a sequential basis during the fourth quarter to $21.2 million from $46.1 million in the third quarter. The Medicare recovery audit contract experienced a couple of changes during 2014.

While we’ve addressed each of these topics at length on our previous earnings call, we thought it would be worthwhile to briefly review all of the changes today, given their collective impact on our 2014 results and expected impact for 2015. First, the CMS recovery audit contract renewal process has been underway for two years since February 2013.

CMS has stated on their Web site that they will not award any additional regions until CGI’s pending appeal is resolved by the Federal Court of Appeal. As you will recall, in August, the U.S Federal Court of Claims found in favor of CMS and denied a suit challenging the payment terms in the new contract.

But in early September, the Federal Court of Appeal granted a stay of the contract award to allow and appeal to the Federal Circuit. Both the CMS and CGI have requested an expedited process. But we don’t have a definitive time when this will be resolved or when the new contracts will be awarded.

Although we are uncertain of timing, we’ve been keeping a strong cash position and balance sheet in preparation for the possibility of two regional awards. Our results as published by CMS in their 2013 report to Congress show us at 99.1% accuracy, while the next best center was at 97%.

Our recovery dollars per point of auditable Medicare, which means we’ve to adjust our periodic interim payment providers in Region A for competitive with the best contractor. We are cautiously optimistic that we may be a strong qualifier for two contracts. With respect to region 5, CMS made that award before the 2014 year-end.

However, you will see that it is under process. While I’m not at liberty to discuss the process in any detail, I refer back to the 2012 and 2013 CMS reports to congress, but it is clear that even on adjusted for periodic interim payment providers, Performant’s recovery of DME was 44% and 28% higher respectively than that of Connolly.

If we adjust it for PIP, those results are 57% and 36% higher in those respective years. While we don’t know what the outcome will be, we believe we can drive greater value to CMS in that program. Secondly, during 2014, the contract transition and procurement process costs disruptions to the Medicare recovery operation.

In February 2014, CMS communicated that February 21 was the last date of recovery auditor could then provide additional documentation request or ADR. Furthermore, CMS identified June 1, as the last day a recovery auditor may send in proper payment files for adjustment.

All operations under the contract would then on hold until August or CMS allow the recovery auditors to restart a very limited number of automated and complex reviews on certain types of specific claims.

The contract was then extended through the end of 2015, but the scope of review remains very limited and is expected to have a minimal impact to our 2015 revenues relative to when we were operating under a full contract. To mitigate these kinds of challenges in the future, we’re working to diversify our healthcare revenue and client base.

To be specific, in successfully running one of the largest payment integrity contracts in the U.S., the Medicare recovery audit contract, we’re building strong capabilities that can be applied to the commercial healthcare integrity market.

It has been our strategy to diversify our revenues by growing our commercial healthcare market position and we’re gaining traction, generating revenue growth. We are excited about the ongoing potential of this business.

We worked with large insurers to create master servicing contracts that would allow us to add statements of work as we identify opportunities to reduce cost for those clients. We continue to see a nice ramp of revenue from our current offering. As example, we recognized $1 million in revenue during the fourth quarter.

And for the month of January alone, we recorded $700,000 in revenue. Furthermore, we won two small integrity contracts during the last two months over existing well established players. We continue to believe there are tremendous untapped growth opportunities in the commercial healthcare space, where we can deliver value.

And although implementation process for several of our contracts took longer than expected in 2014, we believe our commercial healthcare business will have tremendous year-over-year growth in 2015. With that, I’d like to turn the call over to Hakan, to walk you through the financials.

Hakan?.

Thank you, Lisa, and good afternoon everyone. Today, we’re reporting results for the fourth quarter with revenues of approximately $39.7 million, net loss of $2.4 million, or a loss of $0.05 per share, and adjusted EBITDA of $4.9 million.

Student lending revenue totaled $30.7 million, a decline of $11.3 million compared to the fourth quarter of last year, a sequentially higher than the third quarter by $2.6 million.

This increase is due primarily to the recognition of rehabilitation revenues during the fourth quarter that was delayed due to new documentation requirements for loan rehabilitation imposed by our DA [ph] clients in the third quarter.

We’ve also experienced a meaningful increase in the number of defaulted borrowers that elected to choose rehabilitation to resolve the defaulted status compared to other method such as loan restructuring because of the ability to enter this program through lower monthly payment.

However, since the loan restructuring or consolidation process generally can be a shorter revenue recognition process, approximately 1 to 3 months, compared to rehabilitation which is a 9-month process, the shift to more rehabilitation work also resulted in a delay of our revenue recognition.

We continue to refine and improve our processes as it related to the new documentation requirement. As a reminder, we don’t recognize the success [ph] fee for rehabilitation until all requirements have been met.

In the fourth quarter, student loan placements were $1.7 billion, which was up from the $1.47 billion we received in the fourth quarter of 2013 and a slight increase from the $1.68 billion in placements we received in the third quarter of 2014.

Revenues as a percentage of placement volume in the fourth quarter were 1.8% compared to 2.9% in the prior year period. For the full-year, revenues and student loan placements were $138.3 million and $6.7 billion, respectively which represent a decline of 15.5% and an increase of 1.1% respectively over 2013 results.

Our healthcare revenues in the fourth quarter were $2.4 million compared to $10.9 million in the fourth quarter of last year. The decrease in healthcare revenues was primarily due to the delayed CMS contract renewal process.

While our net claim recovery volume decreased to $21.2 million, our claim recovery fee rate increased slightly to 11.4%.In 2014, total healthcare revenues declined 51.8% to $32.5 million compared to $67.5 million in 2013. Revenues from other markets in the fourth quarter were $6.6 million compared to $7 million in the prior year period.

This decline is primarily as a result of a tax amnesty program we conducted in the fourth quarter of 2013. Overall in 2014, revenues from other markets totaled $24.6 million compared to $24.1 million in 2013.

Moving to our expenses, salaries and benefits expense in the fourth quarter were $22.4 million, a decrease of 5.8% compared to $23.8 million in the prior year period, primarily due to lower staffing related to the RAC contract.

Other operating expenses for the quarter was $18.1 million, a decrease of $2.2 million, primarily due to volume related costs. For the fourth quarter of 2014, our reported net loss was $2.4 million, or a loss of $0.05 per share, compared to net income of $7.9 million or $0.16 per diluted share in the prior year period.

Net income for the full-year was $9.4 million or $0.19 per diluted share. Adjusted net loss in the fourth quarter was $244,000 or a loss of less than $0.01 per diluted share compared to adjusted net income of $9.1 million or $0.18 per diluted share in the prior year period.

Fully diluted weighted average outstanding shares were 49.3 million shares in the fourth quarter of 2014. For the full-year, adjusted net income declined by 64.3% to $15.3 million or $0.31 per diluted share. Our adjusted EBITDA in the fourth quarter was $4.9 million compared to $19.4 million in the same period last year.

Our adjusted EBITDA for the full-year of 2014, declined 50% to $44.7 million and our adjusted EBITDA margin was 22.9%. Our effective annual tax rate for 2014 was 45%, an increase of 4 percentage points compared to 2013.

This increase is primarily due to changes in the allocation of the Company’s sales, [indiscernible] factors on a state-by-state basis. With the enacting of market based sourcing rules in various news date a portion in fact have increased from prior years. Cash flows from operating activities for the year ended December 31, 2014 were $29.1 million.

Turning to our balance sheet, as of December 31, 2014, we had cash and cash equivalents of $80.3 million. Our total outstanding debt as of December 31, was $111.8 million. The sequential decrease in outstanding debt reflects continued payments on our long-term debt. With that, let me now turn the call back to Lisa for some concluding remarks..

Thanks, Hakan. I want to discuss some of our recent announcements. But first, I want to provide you with our outlook for 2015 and give you some perspective around our decision. Due to the short-term impact of student loan pricing, combined with minimal RAC revenue. We expect 2015 full-year revenue to be in the range of $150 million to $160 million.

With adjusted EBITDA to be between $20 million and $22 million. Rather RAC contract maybe awarded this year. We assumed no impact for any new RAC’s contract awards. As I discussed earlier we expect the increase in borrowers with attributable location were positively impact the latter part of 2015.

However, the reduced guarantee agency pricing in the first half of 2015, is expected negatively impact revenue and EBITDA, by approximately $5 million per quarter. The Department of Education will reduce pricing on rehabilitation, effective July 1, 2015.

With that said, we’re seeing positive volume build with changes to our production process and we will continue to focus on improving with the efficiency of our operations under this contract. The CMS recovery audit contracts has been in a diminished State during the two year longer term process.

In the meantime, according to CMS the payment error for 2014 in Medicare has increased almost 13% or about $46 billion, a significant increase from prior year of 10.1% and $36 billion. The impact of this contract on our financial results is expected to be minimal during 2015.

Our commercial healthcare business is starting to strengthen as we enter 2015. We anticipate that this part of our business will continue to grow and provide the different certification of our business in the midst of longer term.

We are optimistic about the growth trends that we’re experiencing as we continue our efforts to expand the contracts that we have in place with our commercial healthcare client.

Based on the changes to our operating landscape that we’ve discussed, including the student loan pricing flow through and stronger [ph] Medicare recovery audit contract procurement process. We expect 2015 to be a significant transitional year, regardless of the timing of the contract award.

As I mentioned, we’ve implemented changes in our student loan operations to improve productivity. Also our commercial healthcare business is specifically start driving more meaningful revenues this year. And we expect this growth trend to continue.

We have experienced some headwind, so we will aggressively address all of the controller – controllable labors to build our growth from here. Lastly, I want to talk to you regarding our recently announced M&A opportunity. We view PHX an exceptional business, which is highly complementary to ours.

We believe that the combined companies would create an industry leading comprehensive cost management company in commercial healthcare. With PHX we believe that we would be able to expand and accelerate our presence in products within the large and growing healthcare cost integrity market.

More readily diversify and grow our client base, and very importantly reduced our reliance on large government related contracts.

Diversifying and growing our revenue base has been one of our main goals since our IPO, and we continue to believe that acquiring PHX would be a key step to accomplishing that through their strong revenue growth and there are over 200 different customers.

As part of the broad and due diligence process associated with the acquisition of PHX we carefully evaluated many different financing alternatives. And after a thorough evaluation with our advisors, we determined that the financing method chosen was the most appropriate.

We did not believe however that the market reaction on January 29 reflected the value of performance and clearly not the value of the combined entity, so we pulled that financing from the market.

However we are continuing discussions with PHX and continue to review and evaluate appropriate alternative financing arrangements that would permit us to complete the transaction. We intent to find and execute on opportunities to grow our business through confirmations that accelerate strong growth and drive shareholder value.

While 2015 looks to be a challenging year, our plan is to come out of this year with growth in the commercial healthcare market through strong product and value delivery to our clients.

We are addressing the changes we saw in 2014 head on and have already made good strives in improving operational efficiency, and will continue to streamline our operation with the goal of maximizing productivity.

Moreover we will continue to focus on the goal of diversifying our revenue, creating a strong competitive position and driving top line growth with good margin structure. With that, I’d like to open up the call for questions..

Thank you. [Operator Instructions] Our first question is coming from the line of Mr. Michael Tarkan with Compass Point. Your line is now open. You may proceed with your question..

Thank you. Just first on the revenue guidance. I think it will be helpful if you provide a little more clarity on how that breaks down by segment.

I guess, specifically last quarter I believe you mentioned you expect $3 million to $5 million of revenue from the RAC business per quarter given the limited scope, and I don’t think anything has changed in terms of its scope.

Just wondering if that is still the case on the RAC side?.

Yes, hi Mike. As we look at the RAC revenue guidance for ’15, the range that we provided last quarter $3 million to $5 million is so intact. We are projecting at this point on the lower end of that range, so that’s what we expect from RAC.

Let me also touch on the student lending revenue because they had quite a few moving parts as it relates to student lending in ’15. So, first of all we expect student lending revenue to decrease by approximately 20% next year compared to last year.

And we also expect the Connolly [ph] new revenues to be fairly even on a quarterly basis as we look at it during the year. And some of the key reasons here for this, is that we will have this full year impact of the lower fees from GA.

At the same time we expect that fee reductions will be somewhat mitigated in the second half of the year with increased rehab volume from the DA, and again that will be something that would be a benefit to us in the second half of the year.

Net-net as we look at these guidance, we still expect that the impact to both being approximately 15% of this overall reduction again from ’14 to ’15. Thirdly we also have July 1, where department of eradication is reducing the fees associated with the rehabilitation.

The potential volume offsets as we discussed earlier on this is still to be determined. So, that’s another approximately 25% of the reduction in revenue. And then fourthly, in addition we mentioned there is being a meaningful movement from consolidation revenue to rehab revenue which we expect would delay rev RAC.

The important thing with this is that, its not loss revenue. It’s clearly a function of the longer rev RAC costs that’s associated with rehabilitation, selectively it’s a shift of revenue and that’s approximately another 25% as we look at the 20% reduction.

And then finally, I have also taking into account the impact associated with the recent documentation requirement, but its also having a delaying impact to rev RAC also in essence a shift in revenue, and we do estimate that to be approximately about 25% as well.

So again, now let me give you a little bit more color there on ’15 since we do have a lot of moving parts, but that’s what we expect on the student lending side.

As it relates to the commercial healthcare revenue, we’re encouraged by the ramp that we’re seeing in this area and today we believe that the commercial healthcare would be approximately $10 million in 2015.

And then as you look at the other part of our revenue streams that appears to be pretty consistent again from the year [indiscernible] perspective which we expect in ’15 as well..

Okay. Thanks for that color. On the healthcare side, I guess what gives you confidence. I think you mentioned you are cautiously optimistic. You have a chance to win two regional contracts. I know you are cautiously optimistic. You could take down the home health DME contract.

What gives you confidence you could potentially win both of those contracts? Forget the DME, but the two regional contracts..

As we look at the days where tax rate procurement, part of the benefit is that we had another full year of results that CMS reported to congress and I fully look at our results versus all of the other vendors who have been operating on the contracts, we do post very solid results.

So as I mentioned earlier our accuracy rate is 99.1, which is the highest. And then, if you look at our recovered dollars on a per point of Medicare that we were able to work, just keep in mind that we were not able to work PIP volume, which is pretty significant, its about 27% of our dollars.

So if you look at the report and say the dollars that we recovered on a per point of what we could audit in Medicare we’re very competitive with the number one recover dollar vendor in terms of our ability to return dollars to the Medicare program.

The other couple of aspects that are not, these are not our CMS reports, but clients do report that what services levels are for the recovery.

When I say clients, I mean providers to CMS, they report back in their own publication service levels who are contractors and we consistently have rated the number one service provider and what by that we mean, we get back to the greatest percentage of providers say we get back to them within a day.

Our response to the quality and that we have the best response that every single quarter since hospitals have been reporting these numbers, every single quarter we have been at the top and we have been close to over 80%. The net vendor down is I think somewhere around 60%.

So, when we look at a lot of the factors including the official report for 2012, we do think that that has to come with the consideration when vendors are selected, and we’re cautiously optimistic.

We’re not guaranteeing that we’ll get to, but we really believe that our results and particularly with accuracy and dollar return from Medicare point are meaningful. And as I mentioned earlier in the script that we look at DME results, those are significant results.

They are not -- we’re not 10% over or 5% over, we are between 2012 and 2013 our results are significantly better. And so again, I don’t know what the outcome will be, but we clearly believe that we can drive greater value in the program when we look at program integrity..

Do you have any insight as to why CMS went with Connolly on the home health DME contract then?.

I don’t think I can speak specifically to that, but the -- I think as you may know the requirement is the best value. So, that’s -- I can't speak to why they would have chosen another vendor..

Okay.

And then lastly Hakan, you had mentioned that in addition to the $3 million to $5 million on the healthcare on the RAC side that you had expected to be potentially able to run the RAC program at breakeven EBITDA in 2015 is that still the case?.

I bet it’s still the case, yes..

Okay. Thank you..

Thank you. Our next question is coming from the line of S.K. Prasad Borra with Goldman Sachs. Your line is now open. You may proceed with your question..

Thanks for taking my question. First on the commercial health care revenues, can you give us an idea around the pipeline? I recollect there were like six contracts in the pipeline.

What's the status of the pipeline now?.

Pipeline of new contracts or contracts -- the revenue that we’re forecasting is actually based on contracts we had in operations, and so none of the 15 is essentially based on pipeline, but we certainly have a lot more clients that we’ve been working with and our pipeline is, I would say very robust.

We’ve got, I think the last time that I looked at just at our sales folks we have -- as you know going into the Tier 2 or mid-tier clients, we’ve got a lot of activity.

Again, these are probably going to in terms of start up, there is a process to get the contracts implemented including defining the contracts, and then being able to do all of the data transfers. So, we don’t expect there to be revenues from pipelines in this year, its possible that we’re not anticipating or forecasting that.

So, the revenues for this year is strictly based on what's currently in operation..

Okay, that’s clear. Probably more from an acquisition point of view. You did talk about possibly considering other financing means.

In case that doesn’t turn out to be in your favor, are you looking at for a smaller acquisition given cash you have?.

Absolutely. And as I mentioned earlier in my comments we are going to drive shareholder value.

I’m one of the largest shareholders, one of the largest shareholders in the company and so when we look at growth and providing a sustainable growth company that is a key priority of ours, and we do intent to find and execute on opportunities to grow our business, and that’s going to include M&A activity..

That’s pretty much from my end. Thank you..

Thank you. [Operator Instructions] Our next question is coming from the line of Oscar Turner with Suntrust. You may now proceed with your question..

Good afternoon and thanks for taking my question. I was wondering, can you talk about striking a balance between maintaining some level of profitability in the short-term, well not some level, just maintaining profitability in the short-term where it’s been. And then also being prepared to win future business in the medium to long-term.

I think based on the guidance it definitely looks like you guys are focused more on the long-term.

And I’m just wondering how you all look at that, if for some reason you’re not able to win those two contracts?.

Yes, let me first address your question on cost, and that this is something that we are very cautious with. We are balancing where the cost are going to be occurring with the impact on future revenue, and you also had as we had talked about that the things that attract the position that we have in growing the commercial health care business.

So we are to find balance, and but we’re very focused to ensure that we are going to continue to drive strong long-term revenue growth and so that’s going to be the balance that we’re striking here as it relates to operating cost.

But clearly as we look at our operating cost we had a significant portion of our cost that is variable, which we had the ability to levers as appropriately as we look at the business evolving during the year..

And then to answer your question about how we continue to grow, we clearly have clients with whom we can continue to grow in student lending as well as in other parts of the federal government market. We mentioned our commercial healthcare, and we also mentioned specifically M&A activities.

So, we think a combination of good growth both organically as well as some M&A activity is part of that growth strategy. As we also mentioned we’re starting to see some productivity improvement.

Well, when you’re fully integrated operation as we are, and you all know our technology platform is fully integrated from front to backend including all of our analytics. So we have significant changes which we would consider these to be a significant change as July 1.

We really have to have a big focus on how we’re going to change our entire platform in order to maximize productivity. That’s why it took us longer to get the fixes in place. We also have an operational strategy.

So when we look at how we train our fleet, how we incentivize that, and how we drive our productivity in order to drive value to the client [indiscernible] revenue. We don’t have to change from fundamental core areas of that, it does take us a little bit of time.

But we think, and we’re optimistic that we’re starting to see that turn, and we have the wildcard in same stores sales growth that is an opportunity for us as we move into the back of this year and then in future years as well. So there are several key ingredients to growth, not just one. And we’re going to focus on all of those..

Okay. Thanks. That’s helpful..

Thank you. Ladies and gentlemen, there are no questions in queue at this time. I would like to turn the floor back over to management for any closing remarks..

I just want to thank everyone for being with us on the call today. And as we look at 2015 while it would be a challenging year, we are committed to coming out of this year with growth and with a strong platform that we can deliver share, value to shareholders over the mid to longer term as well.

And we’ll certainly keep you apprised as events happen in our business. So again, thank you very much..

Thank you. End of Q&A.

Thank you. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time and have a wonderful evening..