Deepak Dutt – Vice President-Investor Relations Dean Manson – Executive Vice President and General Counsel Mike Dugan – Chief Executive Officer Pradman Kaul – President-Hughes Anders Johnson – President-EchoStar Satellite Services Dave Rayner – Chief Financial Officer.
Ric Prentiss – Raymond James Andrew De Gasperi – Macquarie Andrew Spinola – Wells Fargo Jason Bazinet – Citi Mark Drucker – B. Riley.
Good morning. My name is Shenica and I will be your conference operator today. At this time, I would like to welcome everyone to the EchoStar’s Second Quarter 2016 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.
I’d now like to turn the call over to Mr. Deepak Dutt, Vice President of Investor Relations. You may begin your conference..
Yes, thank you operator and good day everybody. Welcome to our call. I’m joined today by Mike Dugan, our CEO; Dave Rayner, CFO; Pradman Kaul, President of Hughes; Anders Johnson, President of EchoStar Satellite Services; Ken Carroll, EVP of Corporate and Business Development; and Dean Manson, EVP and General Counsel.
As you know, we invite media to participate in a listen-only mode on the call and ask that you do not identify participants or their firms in your reports. We also do not allow audio recording, which we ask that you respect. So, let me turn this over to Dean for the Safe Harbor disclosure.
Dean?.
Thanks, Deepak, and hello, everyone.
All statements we make during this call other than statements of historical facts constitute forward-looking statements that involve known and unknown risks, uncertainties and other factors, that could cause our actual results to be materially different from historical results and from any future results expressed or implied by such forward-looking statements.
For a list of those factors and risks, please refer to our annual report on Form 10-K and our quarterly report on Form 10-Q filed in connection with our earnings. All cautionary statements we make during this call should be understood as being applicable to any forward-looking statements we make wherever they appear.
You should carefully consider the risks described in our reports and should not place any undue reliance on any forward-looking statements. We assume no responsibility for updating any forward-looking statements. I’ll now turn the call over to Mike Dugan..
the HopperGO and voice remote, which DISH is now offering to their customers. The HopperGO is a pocket-sized DVR that lets users to securely transfer up to 100 hours of recorded TV shows and move these from Hopper 3 or Hopper 2 DVR for on the go online viewing.
This revolutionary solution credits its own private wireless cloud to support up to five devices via DISH anywhere, no internet connection required. The new voice remote is as simple-to-use that incredibly accurate remote that features voice search and command, while backlighting an applicable touchpad for swipe and scroll navigation.
These two solutions provide DISH customers more options to enhance their TV entertainment experience. As the broadcast video industry continues to evolve, we're looking at new solutions that will change the way people watch, create, and consume audio content.
We continue to heavily invest and develop the Sling TV service for DISH Network, and we are excited about the advancements we are making and believe that our upcoming innovation will continue to influence the industry. So now let me turn it over to Pradman Kaul, who will talk about Hughes and their success over the quarter.
Pradman?.
Thank you Mike. First a few financial highlights. Q2 2016 revenue was $339 million, slightly more than the same quarter last year, while EBITDA for Q2 2016 was $106 million or 3% growth over Q2 of last year, driven primarily by the North American consumer business.
In the consumer business, we ended Q2 with 1,030,000 subs, compared to 1,014,000 at the end of Q2 last year. In this quarter, we lost approximately 8,200 subs, primarily attributable to our wholesale channel. Echo 17 continues to be at capacity in many beams thus constraining growth in the subscriber base.
Key enterprise orders in Q2 were from OneWeb, Rite Aid, British Petroleum, JCPenney, York Telecom, Jack in the Box, Global Eagle, IGT Global, IT com, State Bank of India, Avanti, and Bank of India. We ended the second quarter with $1.5 billion of enterprise order backlog, an increase of 28% over the backlog at the same time last year.
The Echo 19 Jupiter 2 satellite construction is substantially complete and we have completed the environmental testing. Final testing is preceding well. It's scheduled for launch in the fourth quarter of this year and we expect to place the satellite into service in Q1 of 2017. It can provide capacity primarily for our consumer business in the U.S.
as well as additional capacity in Canada and Mexico and have presumed the growth rate of our subscriber base. On July 1, we launched our consumer internet service in Brazil using our hosted Ka payload on the Eutelsat 65 West satellite. This is the first expansion of our successful consumer service outside of North America.
I'm very pleased that we were able to complete the project on schedule and within budget. The rollout is being implemented on a state by state basis and we are targeting all 20 states of Brazil to be active this quarter.
Our leads of the Ka payload on the Telesat T19V satellite, scheduled for launch in the second quarter of 2018, will further enhance our capacity in Brazil and other parts of South America.
On the one OneWeb LEO project, we were awarded a significant order for development work on OneWeb’s gateways and we continue to make progress and have completed the preliminary design review for our gateway design. We remain very excited about this project.
To summarize, I’m very pleased with our performance in Q2 and we are well positioned for growth going forward. Let me now hand it over to Anders..
Thank you, Pradman. ESS revenue for the second quarter was $101 million, compared to $125 million for the second quarter of last year. EBITDA in the second quarter of 2016 was $84 million, compared to $104 million last year.
Management of our fleet expansion initiatives continues to be a significant focus to reassess with four Echostar satellites, Echostar XXI, XXIII, 105, and 19 scheduled to launch by the end of this year. Pradman has already mentioned the Echostar 19 and the launch of the HughesNet high speed internet service in Brazil, utilizing the 65 West capacity.
I will address the remainder. Our S-band satellite Echostar XXI has substantially completed construction. The launch was scheduled for Q3 of 2016. However, the last ILS mission on Proton, while successful, experienced some off nominal conditions, which were still being by Khrunichev.
As a result, we have learned that the scheduled launch date for Echostar XXI will likely move to November – October or November of 2016.
Our subsidiary EchoStar Mobile will utilize a portion of the EchoStar XXI capacity to provision its next generation or IP enabled mobile communications network and integrated mobile satellite service network with the CGC component in the EU.
Despite the delayed launch, the EchoStar Mobile MSS service expects to be able to meet all required regulatory milestones by the end of 2016.
Regarding the other two satellites scheduled for launch this year, EchoStar XXIII of flexible Ku BSS satellite designed to fulfill multiple mission profiles has splits slightly and is now scheduled to launch on a SpaceX Falcon 9 vehicle in early Q4. It will initially be deployed over Brazil at the 45 degree west orbital position.
EchoStar 105, the hybrid Ku/Ka and C band satellite that will replace AMC 15 at the 105 degree west orbital slot are under an agreement with the SCS, is also scheduled to launch in the fourth quarter of 2016 on the SpaceX Falcon 9.
We expect our Ku band capacity offering our customer an increased power and expanded coverage of the Gulf of Mexico and the Caribbean to be available in early 2017. Obviously, fourth quarter is shaping up to be extremely busy for us. I’ll now turn it over to Dave Rayner..
Thank you, Anders. EchoStar revenue in the second quarter of 2016 was $758 million, compared to $794 million in the second quarter of 2015 with a reduction primarily attributable to EchoStar Technology and EchoStar Satellite Services offsets partially by an increase in Hughes revenue, more about this when I talk about the specific segments.
EBITDA was $221 million for the second quarter compared to $212 million in the second quarter of last year, an increase of 4%. Net income attributable to EchoStar common stock was $56.1 million, compared to $33.9 million in the second quarter of 2015 and diluted earnings per share were $0.60 compared to $0.36 last year.
The increase in net income was primarily due to the higher EBITDA, lower appreciation and lower net interest expense. Capital expenditures for the quarter were $142 million, compared $179 million for the same quarter last year, primarily due to lower CapEx on satellites as they near construction – completion.
For the six months ending June 30th, capital expenditures were $353 million compared to $357 million last year assuming that a launch schedule stay is currently planned, we expect full year 2016 spending has been the low 800s with satellites and related ground infrastructure driving the bulk of the spend.
Free cash flow which we defined as EBITDA minus CapEx was $79 million for Q2 2016 compared to $33 million for the same quarter last year, the change being primarily due to the lower CapEx in Q2. Turning to the business segments, Hughes revenue for the second quarter of 2016 was $339 million up slightly from last year.
Consumer broadband revenue was up 5% driven by increased subs and ARPU. This increase was largely offset by decreases in the mobile satellite and international businesses.
Hughes EBITDA in the second quarter was $106 million, an increase of 3% from last year, primarily contributor to the EBITDA growth was a change in revenue mix towards consumer services, which has a higher margin, partially offset by investment activity and an increase in G&A primarily as a result of bad debt reserve for large international customer, who declared bankruptcy.
EchoStar Technology revenue for the quarter was $315 million, compared to $332 million last year, the change being primarily due to the lower equipment sales at DISH and international customers as well as the non-recurring item last year.
Offsetting these amounts were increases in billing to DISH to support the Sling TV product as well as other engineering services. ETC EBITDA for the second quarter was $20 million compared to $29 million last year; the decrease is being primarily due to lower revenue and increased marketing spend on SAGE.
As Mike mentioned, we have discontinued the SAGE product within the ETC segment and I would expect to have charges associated with that in the third quarter of 2016.
EchoStar Satellite Service was $101 million for the second quarter compared $125 million last year with a decline primarily caused by the termination of leases with DISH for EchoStar I and EchoStar VIII in the fourth quarter of 2015. EBITDA was $84 million, compared to $104 million in the same quarter.
The decline was the result of the reduced revenue. In our All Other and Eliminations segment, where we record gains and losses on the sales, securities, elimination for inter-segment sales and other corporate transactions, EBITDA for the quarter was $10 million compared to negative $24 million last year.
The increase is being primarily due to the termination of our lease with DISH on EchoStar XVI, Q4 last year, an increase in equity earnings of unconsolidated affiliates, a gain on a sale of an investment and several negative impact items last year.
We continue to have a strong balance sheet at the end of the quarter with approximately $1.5 billion of cash and marketable securities, which is about the same as we ended the year 2015.
Obviously, not included in this are the proceeds of the bond issue that we launched and closed in July for $750 million of senior secured notes and $750 million of senior unsecured notes, both due in August 2026. Let me now turn it back over to Mike. .
Thank you, Dave. In closing, I am honestly very pleased with the progress we have made in Q2 on our numerous strategic initiatives while also delivering solid results in the quarter. It’s now time for questions, but first, let me answer a question that’s sure to come up that is what is our plan for the now $3 billion in cash that we have.
As we’ve discussed previously, we have numerous plans on the drawing boards, the satellite projects on a global basis as well as pursuing other strategic opportunities.
While we are not prepared to discuss anything specific at this time, given the satellite builds are a multiyear endeavor and we have debt maturities in three years, derisking the financing on projects made total sense to us. Operator, we will now open the call for questions..
[Operator Instructions] Your first question comes from the line of Ric Prentiss with Raymond James..
Thank you.
Can you hear me, okay?.
Yes..
Yes..
Yes, good morning. A couple of questions if I could. First, obviously 1Q to 2Q, the equipment dropped because I think you had some extra sales in the first quarter.
How should we think about equipment sales in the second half versus the first half?.
Ric, are you just talking about ETC or are you talking about Hughes or….
Yes, yes….
ETC….
Yes, sorry on the ETC side..
I think what you can expect is to see continued sluggishness in the set-top box sales to DISH. I don’t think it’s any secrete that the subscriber numbers are continuing to decline as they reported on their call. And so without growth within the DISH Network subscriber base, it’s a tough to see a big uptick in the near-term..
Ric, first about the change, remember we introduced Hopper 3 and there were a lot of initial shipments to DISH – so that has something to do with the changes that you just asked about..
Exactly, okay, and the other question, I think you have mentioned second quarter had a bad debt expense for large international customer.
Would that be possibly [indiscernible] and if so what’s the process to look at anyone to recover that or what’s your potential for further write downs would be?.
Well, I’m not going to comment on the specific customer. Obviously, we will work the process to try and recover the maximum amount.
But it’s early in the process, we have made a – what we believe to be a reasonable assumption and accruals for that bad debt reserve depending on how the bankruptcy proceeds, obviously that could be subject to further adjustment at this point, it’s our best estimate of the potential loss..
Any thoughts on the magnitude of what the SAGE discontinued ops might be?.
Not at this point in time. We’re still working through that. And so nothing I’m ready to talk about publicly at this point..
Okay, thanks guys..
And your next question comes from the line of Andrew De Gasperi with Macquarie..
Great, thank you. So I guess my first question is on Echo XVII slight delay. I think you highlighted that you don’t expect any change to the regulatory milestones.
Can you remind us what was that initial milestones at this time?.
Our most meaningful milestone by the end of 2016 is to commence our commercial service in Europe. So at this point given the dates that ILS giving us, we’re still confident that we can have the satellite deployed and sufficiently tested to be offering a minimal service by the end of the calendar year..
Got it, thanks.
And then secondly, can you maybe update us on a CGC approval progress in Europe at this point?.
Well, I think, so we have been focused on all things attendant to the MSS Service and it’s not necessarily focused on fine tuning or pursuing the CGC licenses as the MSS Service sort of precursors anything that might be done in the CGC arena.
We continue to have discussions with the individual member states in their respective regulators regarding our desire to have a single harmonized standard relating to CGC across Europe.
That is not currently the case, but certainly the discussion that are ongoing both in Brussels and many member states regarding a single digital Europe, such a harmonization would certainly be consistent with that theory..
Got it.
And I know this is early with the change at ETC, but what kind of consumer products are you looking at potentially that might be going beyond what you are doing with the Hopper and Joey box right now?.
The Hopper architecture lends itself to great evolution. So, I think the team at DISH has been looking at a lot of things that are very important to continue satellite customers. Along with that we're looking at how we apply some of that technology to expand OTT type services and capabilities to the average consumer.
So there's a lot of development right now along those lines. But in addition to that we're continuing to look at alternate product lines that might go direct to the consumer.
We just decided that although SAGE was aligned for that type of introduction with a competitive atmosphere we decided – even though it might have been a semi-successful product we just didn't think we would get the bottom line performance we needed and we're looking at reapplying those resources elsewhere right now..
Got it. And last question for me, the highlight of some Brexit risk in the 10-Q. I'm just wondering if you can maybe let us know if that's really more regulatory or just some kind of financial component as well. Thank you..
Yes. This is Dean. We don't at this point anticipate major financial impact of Brexit. It's a little too early to tell. Obviously it’s affecting or would affect transfers both in the labor market and in the market product and services between the EU – the rest of the EU and the UK. So, we are keeping an eye on that.
At this point, we don't anticipate major impact..
Got it, great. Thank you..
And your next question is from the line of Andrew Spinola with Wells Fargo..
Thank you. I wanted to ask a question specific to maybe your long-term strategies and particularly around the capital that you’ve raised but when you look sort of in the international markets historically I think you've talked about wanting to maybe expand to more of a global footprint, a global platform for your FSS business.
But given all the distress in that market and what appears to be excess capacity, do you still look at the FSS market internationally as an attractive business, as something you want to participate or has your view of that market changed?.
This is Anders. I think as you point out, there is certain instability in the FSS sector at this point. There's probably some rationalization that will occur. We continue to monitor and have discussions with folks who are in the sector both about collaborative activities where it makes sense as other more strategic activities.
I know that's somewhat sidestepping the question but it’s certainly hold our interest because we do have a long running stake in the satellite business and continue to have faith that it will present the opportunity for the creation of shareholder value going forward..
And maybe sort of along the same lines when you think about sort of strategically where you want to be, I think in one of the previous conference calls Pradman made the comment that he thinks Ku band will ultimately win in the mobility markets.
So when you look at the bands in particular do you have a preference internationally or domestic – well, obviously domestically you do, but sort of internationally would be Ka HDS that you are focused on or are you still also interested in sort of traditional Ku band as an opportunity?.
Yes, this is Pradman. For the markets that we are aggressing at Hughes, which is the consumer access to the Internet I think clearly K is our focal point because of the cost base and the amount of bits you can get in Ku band. I think clearly Ku band would be the right solution for consumer Internet access.
And that includes a lot of the mobile applications like aeronautical and maritime..
Fair enough. I wanted to understand Pradman, sort of following on that commentary. So your investment and your desire to sort of resell OneWeb’s Ku band capacity longer term.
I’m just wondering how Ku capacity is going to fit into your sort of overall Ka strategy, I mean, do you see yourself doing dual mode antennas? How are you going to integrate those two businesses longer term?.
Yes, its obviously if you look at the globe is going to be a long time before we have Ka covering every square inch on the right. So when you look at aeronautical applications and maritime applications we're looking at dual band antennas. So that you can switch from a Ku satellite to Ka satellite.
Now, as you know some of the big FSS operators are building spot beam Ku satellites. And I envisage that we would use some of that capacity to provide global coverage. But the major markets, I think, would be at Ka..
Understood. Last question, I guess for me just on SAGE, Mike, I think you made the comment that there was a sort of significant shift in that market.
Could you maybe help us understand what happened in that market specifically that maybe decided to step away from that product line? And if it’s a product area in general that you have long-term interest in or not?.
Well, I think we were clear that and all you have to do is look at what has gone on in the last year – there's a myriad of competitors and a lot of the small startups and so on that have come into that market.
I would say our concern was being highly successful and again large contribution to EchoStar's bottom line and we thought that with all the focus on satellites and all of the potential investment opportunity as you pointed out – someone pointed out, there's so much confusion in the satellite business, we just felt that as a corporate entity we were better to focus on some of those rather than in the consumer marketplace SAGE has to develop a marketplace.
So, I still think the product has potential. It has some great features and so on but for EchoStar we just weren't ready to proceed with that at this time..
Got it. Thanks..
Your next question is from the line of Jason Bazinet with Citi..
Thanks, I just have two questions.
First, when I look over the last call it eight years of your capital spending it seems like you’re sort of three eras – there’s the pre-Hughes era where you’re spending about $200 million, there was the Hughes era where we went to $500-ish million – 400, or 500 and then sort of the modern area where you have been launching a bunch of new satellites and sort of intermixed in are you went through the transaction with DISH which I think was designed to push some of your CapEx down.
So, what's a little unclear to me as we sort of think about just steady-state capital in this business assuming that you don't to make more satellite announcements to launch more satellites, what is sort of the right steady-state CapEx for the business as it exists today..
You're very correct, Jason. I mean that there have been evolutions over the last eight years; certainly the last couple of years have been very, very intense in terms of capital expenditures around building fleets. As Anders and Pradman spoke to, I mean a lot of that fleet gets launched this year.
We would expect CapEx to drop in 2017 quite significantly, probably down to the sub $400 million range. We will have a slight step up at Hughes because we will have an increase in subscriber acquisition and thus driving up consumer equipment. So that portion of the CapEx will increase.
We’ll also have ground infrastructure scaling cost associated with both Echo XIX, as well as Echo XXI. But, you know, so if you wanted to get down to sort of what is a recurring CapEx level, even as I said, even 2017 will still be a little bit higher than that maintenance level..
Yes..
I would think the maintenance level short of significant new satellite projects, is probably somewhere in the $300 million range..
Okay, okay. And then maybe this question is a little out of bounds, so feel free to of course to deflect, but given the sort of linkage with Mr.
Ergen across both DISH and EchoStar, would you view it as out of bounds for EchoStar to get involved in sort of operationalizing DISH’s spectrum? Is that something that we should at least contemplate as a potential use of capital, or is that sort of not – not sort of in the scope of what you are currently thinking?.
Well, you’re pretty far out of bounds and obviously I think that DISH is going to need some serious technology support to utilize their spectrum and we expect to be part of that. But specifically how much and where and what would be expected to do is really unclear at this time..
All right..
There’s certainly a lot going on in there right now..
Okay, all right. Thank you very much..
Thank you..
Your next question is from the line of Mark Drucker with B. Riley..
Hi, thanks for taking my question.
With respect to average revenue per subscriber and subscriber acquisition cost, can you quantify both of those metrics, please?.
Those are not numbers that we publish. Certainly ARPU has continued to tick up and SAC has continued to tick down. But beyond those trends, it's not numbers that we publish..
Okay.
And with SAC ticking down is that primarily a function of lower equipment cost or is there something else embedded within that?.
No, I mean, the principal reason is lower equipment costs..
Okay. Now with – in your Hughes segment, your subscribers went down a little bit.
Is that a function of capacity in anyway?.
Yes, obviously it is capacity. In this quarter, it was really our wholesale channels that have the negative drop in subscribers. But in both cases, it’s primarily that all the beams that are in India that there are a lot of subs that are essentially full.
So for the rest of this year till we launch Echo XIX, Jupiter 2, we’re going to be facing the same phenomena..
Okay.
And with the launch of Echo XIX, do you expect – I guess to what extent that do you expect to launch to mitigate capacity limitations?.
It will totally mitigate it, right, because we’ll have a fresh satellite with a lot of capacity and all those beams..
And guess as a follow-up….
[Indiscernible].
Okay, thank you.
And I guess as a follow-up, do have any forward perspective on your subscriber base into the rest of 2016 and 2017?.
Yes. And we have said on the last several calls that we expected 2016 to be a tough year for growth given the lack of available capacity that continues to shrink. This quarter, the loss as Pradman said, was driven by our wholesale channels which we have a little less ability to control than our retail channels.
But, we’d see no reason to say that we're going to see significant growth or any growth, for that matter, until the launch of Echo XVII – I’m sorry Echo XIX. And so starting really Q2 of next year we would look to a return to growth on subscriber base..
Yes, be careful about the launch of the satellite and the launch of the server there, at least a quarter differences..
Right..
So system will stay out as well..
That’s all from me. Thank you..
All right. Thank you..
[Operator Instructions] Your next question is from the line of [indiscernible]..
Hi, I’ve got a question on Echo XXIII. I think I heard Mike said during the introduction that you had at least initially put it in 45 degrees.
Can you give us an idea of what backup plans might like if you are unable to secure a partner in the Brazilian market?.
This is Anders, Chris.
I won't speak to the Brazilian development which we've been pretty consistent and what we’ve said about that in the past, but Echo XXIII is capable of a number of optimized configurations and our current plan, post-launch, envisions, ultimately getting to 45 degrees West and satisfying our regulatory milestones as far as bringing the license into service and being capable of providing service.
As far as its future use, I mean, we designed the satellite to do many things to the extent its future is ultimately deployed in another slot it is fully capable of doing that..
Okay.
And did I hear you say that was Echo XV the placeholder that you terminated the lease on that satellite?.
Yes, Echo XV, we had – we kind of coterminated the leases on Echo XV, which we were leasing from DISH and Echo VIII, which DISH was leasing from us in November of last year. So those were reciprocal leases at same rates. We had initially used 15 for some of the early milestone requirements for the Brazil license. It was no longer needed.
And so we terminated those reciprocal leases in November last year..
And so, are there any issues with the timing of the launch and your ability to maintain your spot?.
No. Not – well, the timing of the launch is more driven by the construction of the satellites and the availability of the launch vehicle. Echo XV was initially deployed at the 45 degree location to do some testing, but has subsequently been returned to DISH and moved back to the Eastern United States DBS arch.
Right now, our plan envisions Echo XXIII launching in the fourth quarter and ultimately being at the slot by the end of April of next year, which is in satisfaction of our milestones..
Okay, great. A question for Deepak – not for Deepak, for Pradman.
Can you give us an opinion on what you’re seeing happening in the aviation market, you had an important new product announcement on the modem side, but are you mining up any potential customers for capacity deals on the Echo XIX as you move forward?.
Would you mind repeating it? Some one dropped out. I didn't hear the initial part of your question..
I was just saying you had some announcements around a new modem for the aviation market.
And have you yet hold together a strategy that you can elaborate on about where you're going in the aviation market when you have Echo XIX online?.
Yes, sure. We have today, as you’re probably aware, we have a partnership with Global Eagle and have 700 planes outfitted with our modems that fly not only in the United States, but in some other international markets; all that is operating at Ku-band. When Jupiter 2 or Echo XIX is launched, we will have a lot of capacity available over Mexico, U.S.
and some parts of Canada. So, our objective then would be to put our dual mode antenna and dual mode terminals in the plane, which can operate both at Ku and Ka.
So when they’re flying over the United States, we would expect to use – Mexico or the United States, we would expect to use the capacity on our own satellite on Echo XIX; and then the plane goes over the oceans or in other parts of the world, where we don't have Ka capacity at that time, we would use least Ku-band capacity from one of the existing FSS guys..
Okay.
And can you remind us the status of that antenna? And where you stand in terms of certification and STTs for aircraft?.
We'll be ready to launch. Jupiter 2 will go into service as Mike mentioned earlier in the second quarter of 2017, actually in the late first quarter, early second quarter. And the new dual mode – dual band product, aeronautical product, will be ready at about the same time..
Got you. All right, thank you very much..
[Operator Instructions] And there are no further questions at this time..
Deepak?.
Yes. Operator, let’s – I think we’ve reached the end of the call. I want to thank everybody for participating today and have a good day. Thank you..
Thank you. This does conclude the conference call for today. You may now disconnect..