Roy Zisapel - Co-Founder, Chief Executive Officer, President, Director and Director of Radware Inc Meir Moshe - Chief Financial Officer.

Ittai Kidron - Oppenheimer & Co. Inc., Research Division Michael W. Kim - Imperial Capital, LLC, Research Division Alexander B.

Henderson - Needham & Company, LLC, Research Division Michael Kerlan - Wells Fargo Securities, LLC, Research Division Tavy Rosner - Barclays Capital, Research Division Mark Sue - RBC Capital Markets, LLC, Research Division Catharine Anne Trebnick - Dougherty & Company LLC, Research Division.

Ladies and gentlemen, good morning. Thank you for standing by, and welcome to the quarter 1 2014 earnings conference call. [Operator Instructions] And as a reminder, today's conference is being recorded. I would now like to turn the conference over to our host, Chief Executive Officer, Mr. Roy Zisapel. Please go ahead..

Thank you. Good morning, everyone, and welcome to Radware's First Quarter 2014 Earnings Conference Call. Joining me today is Meir Moshe, our Chief Financial Officer. Meir will start the call by reviewing the financial results, and afterwards I'll discuss the business highlights of the first quarter results.

After my comments, we'll open the discussion for Q&A.

Meir?.

Thank you, Roy, and welcome, everyone, to our first quarter conference call. First, I would like to review the Safe Harbor language. During the course of this conference call, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company.

We wish to caution you that such statements are just predictions and that actual events or results may differ materially including, but are not limited to, general business conditions and our ability to address changes in our industry, changes in demand for products, the timing and amount of orders and other risks detailed from time to time in Radware's filings.

We refer you to the documents the company files from time to time with the Securities and Exchange Commission, specifically the company’s last Form 20-F filed in March 2014. And now, ladies and gentlemen, for the financials. Revenues for the first quarter totaled to $51 million, representing 13% year-over-year growth.

Non-GAAP gross margin remains at 82%. The non-GAAP net income this quarter was $7.8 million or $0.17 per diluted share, compared to net income of $7 million or $0.15 per share in the first quarter last year. GAAP income.

$1.5 million of stock-based compensation expenses, $500,000 of amortization of intangible assets, $1.8 million of litigation costs associated with IP litigation, offset by $130,000 of exchange rate income, bringing the GAAP net income this quarter to $4.1 million or $0.09 per diluted share, compared to net income of $4.5 million or $0.10 per share in the first quarter of 2013.

As a result of new and bigger opportunities, the company is expanding its market presence. Thus, non-GAAP operating expenses increased to $34.5 million in the first quarter, bringing our non-GAAP operating margin to 15%. The level of operating expenses are higher also, as a result of U.S. dollar weakening against both the Israeli shekel and the euro.

For example, Q1 this year, operating expenses are higher about $800,000 versus Q1 last year, only due to exchange rate differences. The head count for the end of the quarter was 884 employee.

During the first quarter, we generated cash in the amount of $80 million, bringing our overall cash position, including cash, short-term and long-term bank deposits and marketable securities, to $303 million, and we have no debt. Shareholders' equity amounted to $303 million.

In addition, as announced earlier today, our Board of Directors has authorized a new 12-month share repurchase plan of up to $40 million of our ordinary shares. Guidance for the second quarter.

We expect revenues to range between $52 million to $53 million, 82% gross margin, operating expenses will range between $35 million to $35.3 million, financial income at $1.3 million, 12% tax rate, share count of 47 million shares and non-GAAP EPS to range between $0.17 to $0.18.

As you can see, ladies and gentlemen, good start for the year, improved results, increased cash and we expect higher and better results in the following quarters of 2014. And now, I would like to turn the call over to Roy..

Thank you, Meir. Our first quarter results reflect a strong start to the year with improved demand across both our cyber security and application delivery solutions. We continue to see strong performance from our North American region. Our U.S. business continue to deliver a very solid year-over-year growth.

The growth is broad-based across both service providers and enterprise customers. In addition, we saw improvement in our international business. We continue to see year-over-year growth in EMEA, while still not at the revenue levels that we look for, we are encouraged by the continuous progress in this region.

In Asia Pacific, we are encouraged by strong wins and a return to year-over-year growth in the region, despite challenges in some markets like China. From a vertical point of view, we continue to see major opportunities in carriers, cloud providers and our key enterprise segments of financial services, governments and online businesses.

All are in need for better security, better response time for hosted and centralized web applications and better availability of their mission-critical applications. In the application delivery market, our unique web acceleration capabilities continue to stand out.

During the last quarter, we announced that JD Williams, a leading Internet and catalog home shopping company, deployed Radware's FastView, cutting page load times for its website by over 25%. JD Williams has over 6 million customers and operates 28 brand websites, served over desktop, tablet and mobile devices.

From multiple industry research studies, it is clear that engagement and conversion rates are affected by the speed in which a website responds to customers.

With Radware's FastView, JD Williams saw an immediate acceleration by 25% of all the web properties and identified improvement for mobile accelerations, all reasons they chose Radware over other vendors with the added advantage of an out-of-the-box solution for easy deployment with very quick business ROI.

Beyond acceleration, our VADI, Virtual Application Delivery Infrastructure, continued to enjoy very good momentum. Our newly introduced high-end platform, the Alteon 6420, became an immediate success with key wins at mobile carriers, financial stock exchanges, leading banks and government entities worldwide.

With leading performance of [indiscernible], very high port density of 4 40-gigabit ports and 20 10-gigabit ports, and the industry highest instance density of 88 instances in a single appliance, we see the Alteon 6420 as the market leading ADC in the 20- to 80-gigabit range.

In the application security space, our Attack Mitigation solution continues to prove its unique capabilities in blocking major cyber attacks on our customer data centers. Last quarter we announced that VimpelCom, our Russian Tier 1 carrier, is providing a new service for its business customers called protection from DDoS attacks.

The service is based on Radware Attack Mitigation System, a realtime network and application security solution. VimpelCom's new business, new service for business customers offers several key differentiation points compared to legacy defense systems.

Key points are wider attack protection coverage, including mitigation of encrypted attacks; automatic detection and mitigation of attacks in the shortest time to protect; and a managed cloud service by VimpelCom, which is backed by their security operating center and Radware ELT for ease of delivery and consumption for enterprise testing.

We are seeing multiple projects across the world where leading carriers are using our Attack Mitigation System to protect their internal infrastructure. And more and more so, and here's a very big potential for us, they're using our AMS to provide their key enterprises with new security cloud services.

During the quarter, we had a major announcement on our next-generation cyber security mitigation architecture for enterprise networks.

Our newly announced AMN, Attack Mitigation Network, combines distributed detection and mitigation elements to work as a complete grid for optimal attack detection and mitigation across all enterprise resources in the data center, at the perimeter and in the cloud.

With real-time synchronization of legitimate user patterns, attack traffic and attack vectors, across all networking-enabled and security devices in the data center and in the cloud, AMN provides our customers with a new level of combating cyber attacks against their data centers.

AMN will be our leading strategy for the next several years, and we're very excited by customer feedback and initial customer trials that will start this quarter for key components of this architecture. On the software-defined network front, we made good progress during the quarter.

We released Defense4All, the industry's first open SDN security application for the OpenDaylight project. Radware Defense4All offers carriers and cloud providers, DDoS detection and mitigation, as a native network service of SDN.

Utilizing the open OpenDaylight controller, Defense4All allows operators to provision a DDoS protection service per virtual network or per customer.

The result is a complete obstruction of anti-DoS resource provisioning and alignment with network operations to provide, manage and monitor the non-service protection as a service within the SDN ecosystem.

In addition to the open SDN application, we are working with key SDN partners to bring to market our DefenseFlow SDN security application, which builds on top of the open SDN application and adds all the various security algorithms and mitigation capabilities we have to offer.

Our working SDN was recently recognized with rather being the best recipient to receive Alcatel-Lucent NFV Visionary Award.

Alcatel-Lucent created the NFVisionary Award to recognize companies from the CloudBand NFV ecosystem, who have had the greatest impact and success in helping service providers drive innovation in their network and moved to the cloud.

Radware received top scores for our development work and commitment to advancing NFV use cases and deployments in virtual load balancing and virtual DDoS prevention. This is further validation of the differentiation we are bringing to the industry in the area of SDN.

Going forward, we believe that some of the announcements we made this quarter are pointing very well to where we believe there will be significant growth in our markets. We are focusing more and more efforts on cloud data centers, SDN and cyber security.

We believe Radware is unique in its ability to provide a broad set of data center application services that include application delivery, attack mitigation and web acceleration, all in great need in cloud data centers. We are seeing very interesting opportunities for growth in these areas.

And as a result, we're investing more resources, both in R&D and in sales and marketing to address these opportunities. This modest expansion in operating expenses is already built into the guidance provided by Meir. Before concluding, I would like to also thank our customers and partners for their continued support and trust.

And the Radware team for all their efforts, commitment and success in growing our business. With that, I would like to open the discussion for Q&A..

[Operator Instructions] Our first question today comes from the line of Ittai Kidron with Oppenheimer.

Meir, just from a household standpoint, can you give me the breakdown, the geographical breakdown of your revenue right now?.

Yes. The breakdown for the geographic this quarter is the U.S, 42%; EMEA, 25%; and Asia back up 33%..

And Roy, OpEx, I understand you see opportunities and you want to invest, but for 5 quarters in a row now, you actually spent above the high end of your guided range for the last 5 quarters. Actually, now that I'm looking at it.

And I'm just wondering, so the investment is not something new, and I'm trying to understand why do we not see, do you think more of the leverage in the model? Your revenue now is 10%, 11% higher than what it was last year, and there's no operating leverage.

And a big part of the story, has been for a long time, that for the top line upside we'll get margin upside. And it sounds like from your prepared comments that you have a lot of opportunity that you see ahead of you that you want to invest in.

So is operating margin leverage not something we should expect over the next 12, 18 months? Is that something that's more of a 2-year out idea?.

No, not at all. There's a very strong operational leverage in the business model, and our investors will see it like they saw in previous years. What we are seeing now, and it's very clear in the last 2 quarters, is that our revenues can grow faster than our guidance.

And as a result, we are building, also, more resources to sustain and, hopefully, even accelerate the revenue growth. So we are seeing very large opportunities, very large projects. We're seeing shifts in the market in software design, network and so on. For us, those are great opportunities.

And we think it will be a great miss on our behalf not to put the right resources in place. Having said that, also for the coming quarter and I think throughout the year, people will see a growing profitability in our business.

I don't think anything changed in terms of the leverage, our capability to improve significantly the bottom line on top line strength. And it will come already this year, I'm not worried on that at all..

Okay. And then lastly, before I open it up to others, can you talk about the contribution of your partners in this last quarter, and how should we think about the evolution of that contribution over the rest of the year, I'm talking Check Point, Juniper and such..

I think it's -- I don't want to speak quarter-by-quarter and start breaking the numbers. But overall, we think that the OEM partners and business partners, I mentioned, Alcatel-Lucent in my prepared comments, I think they will be assisting us, definitely, in very large enterprise and carrier opportunities.

We continue to see that, and we're quite satisfied with the progress we are making on that front..

And next, we'll go to the line of Michael Kim with Imperial Capital..

Just on the security side.

Are you seeing this escalation in DDoS attacks driving more pipeline for AMS? And how are the shift in application layer attacks offering opportunities for growth?.

Okay. So first, there's 2 change we're seeing. Number one, more attacks is a -- if you read -- I don't want to say if we are part of the protection or not, but if you read last week's news there's attacks in the U.S. on hospitals, on online businesses, and so on.

So definitely, attack on things that are, today, are very broad and attacking types of enterprises that we have not experienced them in the past, are obviously increasing. Not only the business from the direct accounts that are attacked, but also from the whole industry, as a whole.

Second, the shift to application attacks, make it very clear that regular defense systems, whether those are firewalls, ADCs that are used for attack mitigation et cetera, cannot block these attacks.

You really need a lot of behavioral algorithms at the application level, you need to be able to really drill down to what is a legit application behavior, illegit application behavior in order to be able to block and know who's the hacker and who's the legit user.

So that puts a lot of strain on large enterprises that need to put new projects in place to beef up their security gateway. Even those companies that thought that they were secure in the past, they see day-after-day that their infrastructure can be easily brought down by the mere attack on things.

And obviously, that drives on one end immediate project when an attack takes place and very strategic discussion in all the other circumstances. So all in all, we are seeing a continued activity in cyber security across the world, with very sophisticated attacks that are targeting the key enterprises and government agencies..

And from a competitive standpoint, are you seeing more activity on the part of the cloud mitigation services and competitors like Prolexic and Akamai?.

So, first, I'm not sure Prolexic and Akamai is a competitor. They are very good customer of ours and their utilizing our Attack Mitigation System. So we have many ways to market. One is through service providers. You mentioned one, I mentioned VimpelCom in my prepared comments, and so on.

Many carriers that are building today advance security services are utilizing or planning to utilize our Attack Mitigation System. It's clearly the best-of-breed, it's proven everyday in the market.

Second, we are selling to enterprises to complement cloud offering on-prem security gateways to be able to handle low and slow attacks, application attacks, situations when with regulations you cannot use cloud provider, because it means shifting your traffic to another country, and so on and so forth.

And last but not least, with the AMN announcement, the Attack Mitigation Network that I've mentioned, we are bringing together the cloud components and the on-prem components to become one integrated Attack Mitigation Network, regardless of who's operating it for the customer benefit?.

Okay. Great. And just on the share buyback program. I think at the end of last quarter you had about $32 million remaining of the previous program.

So does this new $40 million buyback program, supplant or augment the previous program?.

Actually, the last -- a plan that we had, it was for 12 months that ended at the end of April. And now, this is completely a new plan. Coincidence, the number is again $40 million, again, for 12 months as I prepared in my remarks earlier..

And how many share or how much was bought back last quarter?.

Last quarter, we haven't bought back shares..

A question today comes from the line of Alex Henderson representing Needham..

I wanted to ask a couple of questions. First, there's pretty obviously a transition to 10-gig server to switch architectures in the data center starting to accelerate.

Can you talk a little bit about whether that's impacting the location of the sweet spot in your product line, whether it's moving up the stack a little bit to your higher-end products from the lower-end products.

What the mix looks like?.

It might be. I mentioned in my comments that the 6420, which is our highest end and a very high density of 10-gigabit port and 40-gigabit port. Product line is enjoying a lot of success in the large enterprise carriers and so on. So we're definitely seeing a move to the higher end of the product line.

And I don't know if I can attribute that solely to the 10-gig transition in data centers or to the fact that customers are looking to deploy many, many instances. And as a result, they are looking for core switches connectivity.

And to the fact that they're adding more and more services, like FastView that I've mentioned, security services to the same deployment. So the combination of connectivity in the data center moving to 10-gig, the addition of the multi-instance.

And I've mentioned 6420 is up to 88 instances, meaning 88 separate load balancers in the same chassis, and the additional application delivery services. All of that drives higher end products that our customers are looking for..

So can you also address whether you're seeing a shift to higher licensing rate on the systems that are sold relative to your virtual capabilities or whether you're still seeing a fairly decent percent not signing up for additional licenses? Has that percentages started to creep up meaningfully?.

I'm not sure meaningfully, but we're seeing more and more customers coming back and buying more instances. Especially in the carriers, especially in cloud and hosting providers, we're seeing them coming back for additional licenses if they sold out or utilized the existing vADC licenses that they had..

And finally, just with A10 coming out and their comments about pricing and the like.

Could you talk about what you're seeing in terms of pricing conditions and whether that's impacting the market revenue growth rates or margins?.

I think, the price adjustment was done a year ago when F5 came with their new platform line at that time and they adjusted prices. I would say, to similar prices of A10 and then the rest of the markets. So currently, I see the pricing environment is stable, and I don't see issues there..

Our next question comes from the line of Jess Lubert..

This is Mike Kerlan, on for Jess Lubert. I just wanted to dig in to Europe. The companies are making investments in the region for a number of quarters. And it looks like year-over-year growth looks pretty healthy this quarter.

Can you just talk a little bit about your activities in the region and how the pipeline looks heading into the next few quarters, and if we should expect recent improvement to prove sustainable? And similarly, if you could discuss APAC as well..

Okay. So we're pleased with the progress we're doing in EMEA. We did some changes in leadership a year ago, to be exact 9 months ago. And we're seeing very good traction since. You can see, I think, in the past several quarters, that we started back to go back to growth.

And especially encouraging for us is the new product, the growth rates that we're seeing out of EMEA. So we're quite pleased with the progress, and we do look for that to continue. We have good expectations also for the current quarter from that region. So all in all, I think we're progressing well. And having said that, there's still work to be done.

There's a lot of room for improvement in our revenues, and a lot of growth opportunities that we see there. We do invest -- we're back in investing in headcount in the region and we're adding resources in key countries, in key markets like carriers, like cloud and security.

And some of the wins I've mentioned like VimpelCom and others that are not public, are putting us in a very good place to grow. And regarding Asia Pacific, I've mentioned in the last, I think, 2 calls, that we've seen some weakness in countries like China, and that was dragging down our overall performance in the region.

While those challenges continue, I think we've improved some of our execution in other areas and also Asia Pacific is back to growth. Also, we don't see yet double-digit growth in Asia Pacific. Having them back to growth means, for us, that the growth in the U.S. and the growth in EMEA can be much better viewed in our overall numbers.

So also in Asia Pacific, we have done some changes on the sales team 6 to 9 months ago, and we're pleased with our progress..

And then just lastly on the security business.

Is it reasonable to think that this business is now growing 20% plus year-over-year and should we expect it to increase as a percent of mix going forward?.

We're not breaking it out, but definitely we're seeing very good business in security. I mentioned also, in the past, in this quarter and last quarter, that also ADC business is doing well.

As a matter of fact, under some of our new announcements, including the attack mitigation network, ADC components and our security line components are working in tandem in protecting against attacks. So we are going to see much more cross-selling, we believe, and integrated projects across both our key 2 solution set.

Going forward, I believe, both in ADC and definitely in cyber security, there's an opportunity to grow 20% plus year-over-year..

Our next question today is a follow-up from Ittai Kidron..

I just wanted to ask about, Meir, the split between carrier and enterprise in the quarter..

The split, the enterprise was 68% this quarter and the carrier, 32%..

32%.

And Roy, can you talk about DDoS specifically? Is the deal size in DDoS smaller, bigger? Is the competitive landscape different than what it is in ADC? How does your go-to-market need to adjust for that?.

So first, DDoS is one of the problem of attacks for data centers. And while it's easier for the market and the investors to understand DDoS, one needs to understand that the hackers are using multiple techniques or what we call multi-vector attacks to bring down the data center.

DDoS, or high volume, when people are saying DDoS, they generally mean high volume attack, is one of the easy ways to bring a data center down today. But we're seeing more and more, and you can see it in our reports that hackers are using 5 to 10 different methods, simultaneously today as an attack campaign.

That's why we call our solution an Attack Mitigation System, not only DDoS. So on the security front, I don't see large enterprises or carriers, even if the project is called DDoS looking for solely high-volume attack protection, but for a real Attack Mitigation System.

In that sense, the potential for larger project is there, because there's multiple different types of attacks on the servers, on the networks, on the cloud, applications if you have them as an enterprise. So there's multiple entry points to your infrastructure, multiple levels of threats. And as a result, the project can be bigger.

If it's a DDoS only, I would say that can be equivalent to an ADC project. But if you look on the complete attack mitigation program, that's definitely bigger. In terms of the competitive landscape, there are -- our prime competitor in that market is Arbor. Recently, some of the ADC vendors, said that you can do also DDoS protection on their devices.

But so far, we don't see that as a threat. We have also DDoS on our ADC. We don't think it's anyway, by any means, close to what we are offering with the Attack Mitigation System. And so we do some -- we do see some competition, but very little from the ADC business.

In terms of go-to-market, in general, those are the things, security VARs, the networking VARs that we're using today. In terms of partnerships, we obviously have a very good partnership in Check Point that exposes us to very high-level contact they have in the security arena, and we plan to add more.

Another very interesting go-to-market is the service provider. Prolexic, Akamai was mentioned, I mentioned some of the carriers, that's a very good way for them to come with a new business security service that's needed by their customers. And for us, to send more of our capabilities..

When you look at the split of your enterprise and service provider business, it's clear that in the last 2, 3 quarters, the service provider has been the real main driver for your growth.

Can you tell me, when you look within that category, what has been more of a driver there? Has it been more your security capabilities, just pure ADC, what's the main application that's been driving this?.

There's multiple applications across both product lines. So we discussed some of the security applications in providing Attack Mitigation Services. We see a lot of activity in mobile carriers with LTE for traffic steering in high capacities.

We're seeing a lot of activity in value-added services being held in LTE carriers for caching, for acceleration, et cetera. And we're seeing with VADI, with the virtual ADCs, a lot of projects of data center consolidation in the carrier and moving to a virtual ADC infrastructure.

So we're seeing growth both in ADC and in security in the large carriers..

Okay.

And then, lastly, can you remind us the litigation expenses, what relationship is that and how should we think about the expense on that side?.

The expense on that side, this is $1.8 million in each of the last 3 quarters. And we believe it will remain at the same level in the rest of the year..

Can you remind us what is the case that's being pursued?.

We are suing F5 and A10 on several of our patents that are related to our link load balancing and traffic management. We have 3 patents that are part of this process..

Got you. And then, lastly, on the stock-based compensation, there's been a significant increase in your stock-based comp in G&A.

Can you give us a little bit more color as to what was the driver behind that?.

As it was related to G&A, this is stock expense as related to the grant of option to the CEO of the company that's approved by the shareholders..

And next we have a follow-up from Joseph Wolf with Barclays..

This is Tavy Rosner for Joseph. You mentioned earlier an increase in OpEx in order to pursue some growth opportunities. I was just wondering if you could give some color, perhaps, where is that incremental spend from a geographical perspective or if it's on a project lines or emerging opportunities..

So it's in both. I would say in rough numbers around 40% goes to research and development, when we've added projects and product lines and solutions within the spaces I've mentioned. Around 60% goes to sales, marketing and support of these new initiatives.

It's generally going across the world because we're seeing these opportunities all over with, initially, more focused on the U.S. and EMEA, but are generally more advanced..

And we have a question from the line of Mark Sue with RBC Capital Markets. [Operator Instructions].

I was wondering if you had an ability to kind of tabulate what the growth rate of the traditional ADC market would be this year.

And kind of since you're doing more of a solution sale with a lot of the embedded security just, qualitatively, just deal sizes how you see the trends going forward?.

I think growth rates for the ADC will probably go back to normal this year. As I mentioned, also, last year, I still saw the increased demand in the same rate. It was just the revenue per device sold that went down because of the vendors' price adjustment.

I don't think it was anything that was weakened the underlining market demands and the market growth rate. So I would say it should probably be in the low-double-digit growth rates, that's how I would characterize that, that's what the average was in recent years.

In terms of ASPs, the more we are engaged with large carriers and large enterprises, and the more we are selling complete solution, obviously, the ASPs are going higher..

Okay. If we look at the competitive landscape, so Cisco and the partnership with Citrix, some of that is trying to embed some of the network, net scale in technology to the Nexus switch line.

Roy, can you give us your sense of the ACE placement just kind of where you are in gaining share of that opportunity versus some of the other competitors?.

We continue to enjoy it every quarter. We're seeing more and more customers that have transitioned already, but are still out there. And as time passes, I think the Cisco ACE market share is basically cleaning. I don't think it's a long-term opportunity now, the market is probably [indiscernible]. Maybe, beginning of next year, but this is it.

Most of the customers have migrated and -- especially, in our case, we're seeing customers that are buying the VADI architecture, they're deploying initially maybe new applications. And then one by one, they're moving application off their ACE platform to instances on our platform. So we continue to see that, but I think it's soon going to end..

And we'll go to the line of Catharine Trebnick with Dougherty & Company..

Could you give us some color on your partnerships, and how those are developing? And are there -- is there more work in one geographic area than the other? And how was that -- and are you working on any opportunities with the carriers and establishing new partners to help drive more opportunity there?.

Okay. So as I've mentioned before, we're quite satisfied with the progress of our alliances at this point, and we're seeing improved revenue, traction and improved field activity with them, as a whole. Obviously, each partner has its own nuances. Our partnerships, when we set them up, are global.

Although some of them are more successful in a specific region because of field engagement, because of the nature of the solution and so on. I spoke-- a bit about Alcatel-Lucent, which we think can ramp well with us, especially on NFV use cases.

I've mentioned CloudBand, which is a key focus for them and the key platform for carrier cloud and carrier NFV in Alcatel-Lucent that we are part of that solution. We do work on additional alliances, but we will be happy to share the details once those are finalized and we have some wins together with them in key carriers or large enterprises..

And there are no other questions queuing up at this time..

Okay. Thank you. I would like to thank everybody for joining us today, and have a great day..

Ladies and gentlemen, that does conclude our conference for today. We thank you for your participation, and using the AT&T Executive TeleConference Service. You may now disconnect..