Rich Cockrell - Investor Relations Jack Khattar - Chief Executive Officer Greg Patrick - Chief Financial Officer.

Annabel Samimy - Stifel Bill Tanner - FBR Capital Markets Joel Beatty - Citi Traver Davis - Piper Jaffray.

Good day, ladies and gentlemen and welcome to the Supernus Pharmaceuticals 2Q 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference is being recorded.

I would like to introduce your host of today’s conference, Mr. Rich Cockrell. Sir, you may begin..

Thank you very much and thank you for joining us today for Supernus’ second quarter 2014 results call. Results today are being discussed for the quarter ending June 30, 2014. Yesterday, the company issued a press release announcing second quarter financial results.

On the call with me today are Chief Executive Officer, Jack Khattar and Chief Financial Officer, Greg Patrick. Today’s call is being made available via the Investor Relations section of the company’s website at www.ir.supernus.com. Following remarks by management, we will open the call to your questions.

We expect the duration of the call to be approximately 30 minutes. Now, during the course of this call, management may make certain forward-looking statements regarding future events and the company’s future performance.

These forward-looking statements reflect Supernus’ current perspective on existing trends and information and can be identified by such words as expect, plan, will, may, anticipate, believe, should, intend, and other words of similar meaning.

Any such forward-looking statements are not guarantees with future performance and involve risk and uncertainties, including those listed in the Risk Factors section of the company’s Annual Report on Form 10-K filed March 30, 2014. Actual results may differ materially from those projected in the forward-looking statements.

For the benefit of those of you who may be listening to the replay, this call is being held and recorded on August 12 at approximately 9:00 AM Eastern Time. Since then, the company may have made additional announcements related to the topics discussed. Please reference the company’s most recent press releases and current filings with the SEC.

Supernus declines obligation to update these forward-looking statements except as maybe required by applicable securities laws. With that, I would like to turn the call over to Jack. Go ahead, Jack..

Thank you, Rich and good morning everyone. We appreciate you taking the time to join us today as we discuss our second quarter results. In May, we completed the expansion of our sales force to more than 150 sales representatives.

The number of sales calls delivered to target physicians grew by 44% in the second quarter as compared to the first quarter of 2014. As a result, prescription trends continued to be robust for Trokendi XR and Oxtellar XR.

In addition, the combined sequential quarter-over-quarter prescription growth for both products combined as reported by IMS has accelerated.

Between the fourth quarter of 2013 and the first quarter of 2014, total prescription growth was approximately 9,100, while between the first quarter of 2014 and second quarter of 2014, total prescriptions increased by approximately 13,000.

For Trokendi XR and Oxtellar XR combined, the second quarter IMS prescriptions totaled 43,207 representing a 43% growth over the first quarter of 2014. Of that total, Trokendi XR prescriptions were 28,773 representing a 54% increase over the 18,727 prescriptions in the first quarter of this year.

The remaining 14,434 prescriptions for Oxtellar XR represented a 26% increase over the 11,481 prescriptions filled during the first quarter of 2014. We have been seeing on an average a higher WAC price per prescription and more favorable gross to net adjustment.

Based on that, we believe we need to be around 27,000 prescriptions in December instead of our initial estimate of 30,000 to reach cash flow breakeven on an operating basis. For the month of June, total prescriptions for Trokendi XR and Oxtellar XR as reported by IMS and Symphony SHA were around 16,000.

Given that the sales force expansion was completed in May and the full impact of such expansion will be in the second half of the year, we continue to be comfortable with the growth trajectory of our prescriptions towards our breakeven target. Both products continue to see increased managed care coverage.

For Oxtellar XR we now have approximately 160 million lives covered with 129 million lives in commercial and 31 million in Medicaid, representing an increase of 10 million lives in total. Similarly Trokendi XR coverage increased by 1.5 million lives to 145 million lives in total with 118 million in commercial and 27 million in Medicaid.

In addition we are making solid progress on developing our pipeline candidates SPN-812 for ADHD and SPN-810 for impulsive aggression in patients with ADHD. For SPN-810 we are completing our scale up and manufacturing activities and continue to be on schedule to start patient dosing in a Phase 3 study on SPN-810 in 2015.

For SPN-812 we initiated and completed a pharmacokinetic study in the second quarter to test extended release formulations for the product. This study was successful and we have selected and extended release formulation that will be the basis of the product for testing in a Phase 2b study in 2015.

Finally, in the second quarter, our partner United Therapeutics launched Orenitram which is the first oral prostacyclin product approved for the treatment of patients with pulmonary arterial hypertension.

As announced in the prior press release we entered into a $30 million royalty agreement with Healthcare Royalty Partners to monetize a portion of the royalty revenue stream. This was a major accomplishment for Supernus.

It strengthened our balance sheet with a strong cash position that is now expected to be in the range of $75 million to $85 million by year end and that should take us well into sustained profitability without the need for a future capital raise.

It also allowed us to have significant added operational flexibility and capacity from a business development perspective. I will now turn the call over to Greg Patrick, our CFO to discuss our financial results..

Thanks Jack. As I review our financial results, I would like to remind our listeners to refer to the second quarter 2014 earnings press release issued yesterday as well as our Form 10-Q for the second quarter, which will be filed later this week. Net product revenue for the second quarter of 2014 was $27.6 million.

This is comprised of $22.6 million for Trokendi XR and $5 million for Oxtellar XR. As of the second quarter, we have sufficient data to estimate rebates, returns and allowances upon shipment of Trokendi XR to wholesalers. Therefore, as of the second quarter we have transitioned to contemporaneous revenue recognition for Trokendi XR.

Revenue for Trokendi XR for the second quarter is therefore comprised of three components. First, $7.2 million for prescriptions filled in the first quarter of 2014. Second, $10.5 million for prescriptions filled in the second quarter of 2014. Third, $4.9 million for products in the distribution channel as of June 30.

Net deferred product revenue on the balance sheet as of June 30 has been recognized and the balance is eliminated due to the transition to contemporaneous revenue recognition.

On a quarter-over-quarter basis reported Trokendi XR revenue increased by $18.5 million from $4.1 million in the first quarter which was based on 11,244 prescriptions filled during the fourth quarter of 2013. Net revenue from shipments of Oxtellar XR to wholesalers for the second quarter of 2014 was $5 million.

Gross margin for the quarter was 94% compared to 94.5% in the first quarter. Going forward, we continue to expect product gross margins to exceed 90%. Selling, general and administrative expenses for the second quarter of 2014 were $19.6 million. Year-over-year SG&A increased 60% from $12.2 million in the second quarter 2013.

This increase reflects the expansion of the sales force to more than 150 representatives coupled with increased promotional and marketing related programs. Research and development expenses during the second quarter 2014 were $4.7 million as compared to $3.5 million in the second quarter of 2013.

For the quarter, operating income totaled $3.8 million as compared to a $15.5 million loss in the second quarter of 2013. Reported net income for the second quarter 2014 was $3.2 million or $0.08 per diluted share as compared to a net loss of $27.4 million or a loss of $0.89 per diluted share reported for the second quarter of 2013.

The increase of $30.6 million year-over-year primarily reflects the revenue generated from our commercial products coupled with the impact of issuing $90 million in convertible debt in 2013.

Approximately 42 million weighted average common shares were outstanding in the second quarter 2014 as compared to 31 million shares in the second quarter of 2013. As of June 30, 2014, $15.2 million worth of 6-year $90 million convertible notes bearing interest at 7.5% per annum have been converted to common stock.

Excluding a non-cash gain of $0.7 million related to changes in the fair value of derivative liabilities, non-GAAP net income for the second quarter of 2014 was $2.6 million.

As of June 30, 2014, we had $62.7 million in cash, cash equivalents, marketable securities and long-term marketable securities compared to approximately $70.5 million as of March 31, 2014.

Inclusive of the royalty monetization payment of $30 million that was mentioned earlier, we expect cash burn for full year 2014 to range from $5 million to $15 million with the year end cash and marketable securities balance projected to range from $75 million to $85 million.

We also now expect reported total revenue for calendar year 2014 to be approximately $105 million. And as Jack mentioned earlier, we continue to forecast that the company will be cash flow breakeven by year end. I will now turn the call back to Jack for some closing remarks..

The second quarter has been marked by continued strong momentum in prescription growth for both products. We continue to make excellent progress toward our full year objectives.

We closed the first half of the year with record revenues of $38.7 million reflecting the strength of our business and the strong foundation we are building at Supernus, combining the first half year to-date revenue of $38.7 million with the royalty revenues of $30 million results in a total of $68.7 million.

This total is approximately two-thirds of the way towards our revised full year revenue objective of approximately $105 million. Our business is well capitalized and the stage is set for us to move to the next level in building Supernus.

We are looking forward to having a banner year in Supernus history by achieving profitability for the full year and passing the $100 million mark in revenues. I would now like to open the call to your questions..

(Operator Instructions) Our first question comes from the line of Annabel Samimy of Stifel..

Hi, thanks for taking my question. Congratulations on the quarter. I had a few.

You had mentioned that the WAC prices that you are seeing – you are observing are increasing, can you tell us what’s driving it exactly, is it the people are taking price increases or is the gross to net discounting becoming less aggressive? Can you just explain the trends over there? And then I will follow up with some other questions. Thanks..

Okay, Annabel, you asked about the WAC price increasing a bit as compared to our initial projections, I would say it’s a confluence of a couple of things. First, I think there is a little bit of a different mix than we have originally anticipated. So, that’s ignoring to our benefit.

And I would say secondly, we have taken price increases judiciously during the year, but I think probably a little bit differently than we originally envisioned and that also has factored into our WAC pricing expectations for the year. In terms of gross to net, you referenced that also, that’s clearly an evolving picture and will change over time.

Once again, I think we started the year with conservative expectations for gross to net. And as we progress through the year, we found that those conservative expectations were indeed quite conservative and our expectations going forward in terms of how we frame our cash flow breakeven has now been made it to match those revised expectations.

So, I think we are a couple of points better in terms of gross to net and that’s playing through in terms of the common stack made about expectation in terms of cash flow breakeven and run rate to do that..

Okay.

Could you actually put any numbers behind that when you said the mix is different, is it because the doses that are being used are higher, when you say price increases? I guess, if you look at the price increases myself but if you can just give us an idea of what you have taken and then on the actual gross to net would you share that with us?.

Regarding the price increases, I mean we took the 9% price increase in February or 8.9% increase in February on Oxtellar XR. So, that’s the only one that actually will take effect or have taken effect in the first half of the year, but it’s really a combination of that and as Greg said the mix of the product.

So, we are seeing a higher number of tablets per prescription, which is really increasing the revenue obviously on a per prescription basis, because of the mix of the products and the way physicians are prescribing it, which is obviously always very difficult initially to project as to when you first launch the product and you think you might look at the market exactly, but then this is once a day, the market is twice a day.

Obviously it is very difficult to see what equivalent dose strength on a daily dose basis physicians will end up using. So, it’s really a combination of all that, that led to the change..

Thanks..

Annabel, you asked about given gross to net, I would say that long-term – what the long-term is going to sort out, but we have always said that long-term gross to net for Trokendi XR, we expect to be kind of in the 75% range, so something from a gross to net reduction about 25 percentage points and Oxtellar XR being more heavily represented in Medicaid would be in the lower 70 – say 73, 72, so gross to net reduction 27%, 28%.

I would say where we are right now is several percentage points better than that on both products. So, I won’t give exact numbers, but I would say that our gross to net overall is more in the reductions are more in the low 20s rather than the mid to upper 20s right now for both products.

Did that help?.

Okay. Yes, thanks a lot. Thank you for detail.

Just a couple other questions, have you seen, I mean we know that Upsher-Smith’s product was approved, do we seeing launch, we haven’t really seen a show up in the prescription trends? And then also one more follow-up on the user royalty of $30 million that you got I guess for monetizing that royalty stream, is that – that’s $30 million upfront that we shouldn’t expect any further royalties after that, am I understanding that correctly?.

Yes, let me answer that question first, because that’s an easy one. I have to give Jack the hard ones. The $30 million, yes, we have received that in July as we said in our press release.

And the way that is configured is that is that we have given certain royalty rights over to healthcare partners and that is for a period of time to a certain pre-determined cumulative return is attained. When and if that cumulative return is attained then those royalty rights come back to us.

So, I would say in the short to mid-term, you should not expect us to be recognizing royalties, but depending on how (indiscernible) runs that may come back to us several years as time will tell..

Okay, great. Thanks.

And then the Upsher-Smith, please?.

The Upsher-Smith, I mean, we saw last week I believe few prescriptions recorded toward their products, just to update everybody basically what they did is they launched two products, the Qudexy XR, which is the brand, but at the same time or actually before that, they made available also an authorized generic to the Qudexy XR product.

And it’s very important to emphasize and clarify to everyone that the AG or authorized generic is a generic to their brand. There is no generic Trokendi XR that is approved. Qudexy XR, the authorized generic of Upsher-Smith is a different label than Trokendi XR. They are two different products.

They are bio-equivalent by the FDA and they are approved separately. So, there is no substitution and there should be no substitution. Any substitution if it does ever happen will be a legal substitution by the pharmacist or by whoever could be promoting that type of substitution.

So, the two products are very separate and the authorized generic is Trokendi XR and as I said, we saw few prescriptions last week..

Okay. Just – if I can follow-up on that. Have payers or PBM has been very specific about which drugs their reimbursable they don’t reimburse and if – are there any that are preferred over others – other than obviously the generic to reference molecules..

I mean..

Or do they internally get them all – allowed them all for – provide access all of them..

Yes, as far as managed care, obviously this is still early for us hopefully everybody will understand. It’s not like we have full months or couple of months to read what the market is doing at this point. But out initial read in our and our initial market research, we believe we’re well infringed in managed care.

We have a very strong position as we said and we continue to build on the coverage of our product. So, it remains to be seen as to what position as they will get on their product. We don’t expect it to be that different from being AT-003 like every other extended release product the market has treated before.

Before us and including us so, we expect this to be the norm as far as their authorized generic, they probably are trying to put it on a theatre one whether they will be successful or not again that will – we’ll have to wait and see what happens there.

This is a little bit unprecedented for a company to launch a brand and authorized generic at the same time and managed care can see through that strategy and we’ll see how they react to it..

Great, thank you..

Thank you. And our next question comes from the line of Bill Tanner of FBR Capital Markets. Your line is now open..

Thanks. I had a couple of questions, Jack, on 810 I know in your press release, it says that company is progressing toward full scale production of the compound, just curious if you could comment as to that.

And then also I know in the past, you’ve talked about working with the FDA to determine what it would be – what would need to be shown for the drug to be approval.

I wonder if you can comment on what that – I mean assuming – presuming since year one of the full scale production you have reached some kind of agreement or feel like you may and then one curious if this would be done under an SPA?.

Yes, what we saw – it will be done under the SPA that’s the goal and that’s the discussion we’ve had with the SPA and we’ll continue to go down that path. Regarding to manufacturing, we’ve been very, very busy in the scale-up transferring the technology.

So, we’re really well underway on all these activities and as far as the design of the Phase 3 study, the protocols we will be finalizing those in the third, fourth quarter depending how quickly we can do that with the FDA with their agreement obviously before we push the button on starting recruiting sites and so forth for the Phase 3.

So, we’re very pleased with the discussions that have been going on with the FDA on this program.

Again as I mentioned before, we believe the FDA is very happy to see somebody actually developing something industrial because it has been a neglected unmet medical need without anything that has been approved or developed the right way as physicians use a lot of things off label.

But all these other products have their issues as far as side effects and negative implications to children and so forth. So, we’ve been very pleased with the interaction with the FDA and continue to push forward. This is our top pipeline product. So, naturally we’re putting a lot of emphasis on it and we are investing heavily in our activities.

In addition to that, I think we mentioned a little bit earlier it would be last quarter, but we continued to move along as well as animal study, the (cytogenetics) studies and so forth.

So, all these are moving in parallel or though, they are not very visible to the street, but these are things that we need to do regardless to make sure we have a complete strong NDA when we do filed the NDA, we actually completed one of the species on the cytogenetics study. We’re completing the second one.

So that is actually well, well underway through completion as some of you know these are two year cytogenetics studies and we’re almost finished with both studies. So, a lot of progress and on the dosage strengths and so forth obviously those will be also finalized when the protocol is all set.

But that doesn’t mean we can’t complete as much as possible the commercial scale up of the technology itself..

And then just a couple of follow-ups on that, I guess is contemplated that you need to conduct the second Phase 3 study.

And then also can you just give us a rough timeframe of what the treatment period in this study might be?.

Yes, I mean, on this program, we will need two Phase 3s because this is different, although this is a 505 (b)(2) NDA. This is a little bit different than obviously our previous two products where they were studied for the same indication that the molecules have been known for.

So for molindone which is an antipsychotic originally a very old antipsychotic given that now we are studying it for a new indication we will be required to do minimum of Phase 2, Phase 3 study. I say minimum because there is a potential we might go for a much broader indication that is not just for ADHD patients.

You may recall we do believe and we have said that the potential of this product is not only in ADHD patients. There is a pretty strong prevalence of compulsive aggression and autism, in bipolar and schizophrenic patients and so forth.

So part of the discussion with the FDA that is going on and will continue to go on is that we need only two Phase 3 studies and you will give us an indication for only ADHD or could you do three studies and then we get a much broader indication.

So, obviously we are weighing all of that and trying to make sure we have the best development package here and the best approval package with the broadest potential label we can get..

Okay. And then may be just on the treatment period, the duration just trying to give a handle on..

I mean, the specific treatment duration is still in discussion with the FDA, I mean, the previous ones we did – the one we – if we look at the Phase 2a study and the Phase 2b studies, I mean, those who are well within the 12 week treatment.

So, we don’t expect this to be a very, very long-term treatment because you can fairly easily detect and count the number of episodes of aggression and the extent of the aggression. So, it’s not like you have to wait for a long period of time to see the effect of the drug..

Okay, perfect. Thanks very much..

Sure..

Thank you. (Operator Instructions) Our next question comes from the line of (indiscernible) of Cowen & Company. Your line is now open..

Hi, guys. So, last quarter you mentioned that you were aggressively looking at the – on the PD front and just want to get an update on where things stand there.

And if you could also give us kind of a sense of what the earlier profitability and cash flow positive and how you think about your ability to lever up and just a little bit of context around the covenants that are on the convertible notes that you have..

Sure. Why don’t I take the back end of that question and perhaps Jack will handle the front end of the question. So, in terms of the covenants – the covenants are regarding the convertible notes are several.

They covered the two most important ones regard profitability – measured on a 12 months trailing basis, EBITDA and free cash flow and those limit how much leverage the company can apply.

So, in terms of applying leverage to our balance sheet, what we want to do that and at a substantial way of what has to take – what have to consider both where we stand on a 12-month rolling basis and then perhaps also consider taking out or doing something about the existing – the residual notes as Bob mentioned earlier it’s $50 million of the $90 million of notes have converted.

We continue to see conversions come through rather sporadically. That frankly is an issue that we’ll address going forward. Right now, the company has no plans to try to preventively take out the rest of the notes. But that’s always something we could do yes, the facts and circumstances warrant it so, I’ll ask Jack to respond to biggie question..

Regarding MVD and as I have mentioned earlier and we will continue to say that, I mean, we are very active MVD we continue to always look at opportunities as they come along whether the products, their companies, their licensing, their M&A that mean, we are always active on that front and looking at things that strategically fit well to what we do.

Clearly today we have probably one of the biggest footprints in the neurology space with our expanded sales force. We are very busy and had been very busy launching two products.

And therefore at some point, it will make probably more sense to bring in other products, but we don’t want to neglect what we have and we want to make sure we do a very successful launch of our products and infringe them well in the marketplace. But we continue to look at these kind of different assets as they become available over time.

We have been involved and active all along actually for the last two years or so. And it’s very hard to predict obviously what we do or we don’t do because as you all know these things come and go very quickly sometimes.

As far as you comment on profitability I mean looking forward clearly the $30 million transaction that we did this year back in June, July timeframe was an important and significant accomplishment for this company.

It’s really changed the landscape as we believe for Supernus because it bridged us pretty quickly to get to the cash flow breakeven point and profitability.

And as you recall both products Trokendi XR and Oxtellar XR are fairly high margin products and therefore given we haven’t given any guidance for 2015 and what the profitability will be and so forth. But we certainly believe we are getting to profitability but getting to it in a sustainable manner.

This is not just like a quick hit that it just happen the $30 million obviously helped us to get there but it helped us to get to a sustainable position not to hit it in one quarter and then we are going to go back to cash flow negative.

So that’s why we are very comfortable with the projections and the way the company and the business is building over time. And 2016 should be a solid year for us given the strong gross margins of Trokendi XR and Oxtellar XR..

Thank you.

Thank you. And our next question comes from the line of Joel Beatty of Citi. Your line is now open..

I am calling in for Jon Eckard. Thanks for taking my question.

A question on the royalty agreement, does the new breakeven point that you mentioned also consider the royalty agreement?.

The new breakeven point, you mean the 26,000, 27,000 prescriptions?.

Right.

Well, I mean the royalty agreement the $30million is exclusive of everything we are doing, so the base brand or the business in Trokendi XR and Oxtellar XR and the cash flow breakeven which we said on an operating basis what we meant by that is with a normal operations excluding a one-time event such as the royalty..

Okay, great. Yes, that makes sense.

And then one last question on Oxtellar the growth looks pretty good 26% quarter-over-quarter but the revenue was almost flat, what do you think are the contributing factors to that and how should we think about the revenue growth for Oxtellar in the next quarters?.

I mean, quarter-over-quarter there is always sometimes fluctuations in shipments to wholesalers. So the key to us what we obviously we look at is mainly the growth in the business and has been very, very healthy I mean the 26% is fairly strong growth in prescriptions.

We continue to see strong withdrawals from wholesalers to pharmacists, so I mean we get that data sometimes on and off to keep our finger on the pulse of the business.

So, this is expected to see these kind of fluctuations on a quarter-to-quarter in a business that is still being established, especially with the expansion of our sales force and so from that perspective, we are not concerned about it..

Well, I would say that our anticipation is that the steady state, that shipments to wholesalers and the underlying prescription trends are going to mimic one another..

Great. Thanks..

Sure..

Thank you. We now have time for one more questions from the line of David Amsellem of Piper Jaffray. Your line is now open..

Hi guys, this is Traver Davis on for David. Thanks for taking the questions. Just a quick couple drilling down on expenses, is there any early estimate on what the top of the Phase 3 program will be for the impulsive aggression product – aggression product.

And then secondly on SG&A expense and how that’s trending so it looks like you did about $20 million in the third quarter now that the expansion of sales force this round is now complete, how can we see that number trending for the rest of the year and are we looking at a number closer to $100 million in SG&A expense for 2015 or should we see the growth normalized on that front? Thanks..

I’ll start by talking about the Phase 3 on SPN-810. Again, I mean given that we are in discussion with the FDA on finalizing protocols and designs and so forth. I am sure you will appreciate, I mean any numbers I throw out may change completely depending on these so, it’s very hard for me to give you the specific number as to what the Phase 3’s cost.

I think if you look at what normally a Phase 3 cost in ADHD in general maybe increased a little bit because this is a new indication whatsoever, you probably will end up in a good place anyway. Regarding the other issues, I mean, clearly we haven’t issued any guidance for 2015.

So, it’s going to be hard for us to give you specific numbers as to what 2015 is going to look like from an expenses or SG&A point of view and so forth. What we did say several times that the expansion of the sales force as you rightfully pointed out has been basically completed.

So, it’s not like in 2015, we are going to be further expanding our infrastructure. We don’t need to do that. We are then with the expansion of the sales force. And therefore, we look for 2015 to be a much more efficient year for us obviously..

Thanks..

I think Jack here, the only thing that I would add regarding SG&A is that actually with the recruitment of sales force in the second quarter, we are seeing and deploying (indiscernible) some one-time expenses which we don’t expect to repeat going forward. So, if anything, my expectation around SG&A is going to be very flattish.

But as we have mentioned numerable times, the sales force has been configured to create a scalable business model.

In other words that the sales force once deployed doesn’t meet additional augmentations spending wise or otherwise to continue to drive revenue growth, so as we hit cash flow breakeven by year end and expand the business next year that we expect a very significant portion of that incremental revenue and margins to drop to bottom line..

Okay. Thanks guys..

Thank you. I would now like to turn the call over to management for any closing remarks..

Okay. Thank you all for joining us today. We are very excited about our accomplishments in the first half of this year and very much look forward to the second half. As I mentioned earlier, we are well capitalized and the stage is set for us to move to the next level in building Supernus.

We are very much looking forward to having a banner year in Supernus history by achieving profitability for the full year and passing the $100 million mark in revenues. Thank you so much..

Ladies and gentlemen, thank you for your participation on (Technical Difficulty)….